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Rainy Days are a manufacturer of umbrellas. They manufacture a single basic model. Budget estimates for the current year based on expected sales and production
Rainy Days are a manufacturer of umbrellas. They manufacture a single basic model. Budget estimates for the current year based on expected sales and production of 100,000 umbrellas are Sales Variable Expenses Fixed Expenses Required: $1,600,000 $1,200,000 $250,000 a) Calculate the break-even point in sales dollars. b) Calculate the expected profit based on the above projections. c) Calculate the expected profit if sales decrease by 20% d) The owner is considering producing a deluxe wind resistant model. This model is expected to sell for $20. Variable production costs for this model are expected to be S13. Due to additional plant required to produce this new model, total fixed expenses are expected to increase to $300,000. Assuming the deluxe model will account for 40% of sales, calculate the desired sales level by product if the owner requires a profit of S200,000
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