Requirement 2: Single-product CVP

Assume the following additional cost data are available for FYX1 for ethernet repeaters:

Selling price per unit $360.00

Average variable cost per unit

Direct materials $82.70

Direct labor $40.00

Manufacturing overhead $29.60

Selling expense $20.50

Annual total fixed costs

Manufacturing overhead $8,500,000

Selling expense $2,250,000

Administrative expense $2,250,000

As a result of changes in macroeconomic conditions, you expect the cost of direct labor to increase 18% in FYX2. Fixed administrative costs are also expected to increase in FYX2 by $300,000 due to salary increases. All other costs and expenses are expected to remain the same as in FYX1. Your divisions operating income target for FYX2 is $2.5 million.

a. If your division experiences the cost increases described, then how many ethernet repeaters will you need to sell in FYX2 to break even? (Round your answer to the nearest whole unit.) (1 point)

b. If your division experiences the cost increases described above, then what is the total sales revenue (in dollars) you will need to achieve in FYX2 to earn your divisions target operating income of $2.5 million? (1 point)

W AutoSave Off H ACC 222 - DDJDM Project - Spring 2022 (1).docxSaved to this PC = File Home Insert Draw Design Layout References Mailings Review View Developer Help D Times New Roman +=+= ) A X 12 TIA BI U ala Uebx, x Ao J A. DA Aa = Normal No Spacing Heading 1 Paste BNT AT Clipboard S Font IS Paragraph Styles Requirement 3: Multi-product CVP To diversify your division's product mix, you are considering expanding your product line in the coming year by introducing a second product, a standard router. Projected revenue and cost data for the router are as follows: $300.00 Selling price per router Variable costs per router. $25.50 Direct materials Direct labor Manufacturing overhead Selling expenses $27.50 $30.00 $7.00 If you decide to introduce this rouler in FYX2, then no additional manufacturing facilities or capacity would be required. Fixed advertising costs, however, would increase by $125,000 to promote both ethemet repeaters and routers. Your company's marketing department estimates one router would be sold for every three ethernet repeaters during the new product's introductory phase, which is expected to span the next 18 months. a. If your division introduces this router, maintains the current selling price of $360 per unit for ethernet repeaters, and experiences the cost changes described in Reg. 2, then how many unils of each product would your division need to sell to break even in the coming year? i. Break-even (in units) of ethernet repeaters: (7 pour) ii. Break-even (in units) of routers: (1 poin() iii. Total break-even sales (in combined units): (1 point) 1376 words M Type here to search. Undo Page 3 of 5 4 Text Predictions: On O Search (AIL+Q) Accessibility: Good to go O St Aruthmh@miamich.edu o Editing Dictate Voir IS Focus 3 EB E R Editor Editor Comments LO Reuse Files Reuse Files X Share 2:22 PM Monday 5/2/2022 I 8004