Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question Three: East Manufacturing Company was established in February, 2020 to produce and sell only product (X) as a start. The following costs were set

image text in transcribed

Question Three: East Manufacturing Company was established in February, 2020 to produce and sell only product (X) as a start. The following costs were set by the internal experts of the company for product (X): Monthly fixed costs $750,000 Variable cost per unit $60 Monthly production 20,000 unit Based upon the above information, the management of the Company has set the following targets: Target selling price $150 per unit Monthly target profits $100,000 Requirement 1: Even though the level of competition is low, the president of the company is very concerned about the selling price of the product; he thinks that the price might be high, so he asked you (as a senior manager) to determine the lowest selling price that the company can sell all monthly production and achieve the target profit set by the internal experts. (4 Marks) In March, 2020, the company decided to sell product (X) to one customer only. The following customers offered to purchase the following quantities from product (X). The offers are presented below: Offers received Customer A Customer B Customer C Customer D Quantity 19000 units 15000 units 17000 units 20000 units Price offered $106 $115 $109 $103 Requirement 2: The president of the company asked you to recommend which offer to accept from the above received offers knowing that the cost of storing one unit of product (X) will be $14

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Finance Book

Authors: Stuart Warner, Si Hussain

2nd Edition

1292401982, 978-1292401980

More Books

Students also viewed these Finance questions