Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Rossiter Fittings produces two models of pipe fittings for underwater lines. The two models (RF-12 and RF-25) have the following characteristics, as developed by
Rossiter Fittings produces two models of pipe fittings for underwater lines. The two models (RF-12 and RF-25) have the following characteristics, as developed by a product cost analyst: Selling price per unit Variable cost per unit Expected units sold per year RF-12 $ 427 RF-25 $ 567 $ 347 $ 407 3,627 12,493 The total fixed costs per year for the company are $1,164,400. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix is the same at the break-even point, compute the break-even point in units. c. The head of marketing agrees with the data provided by the cost analyst but believes that the sales of the RF-12 model will be double in units from what the cost analyst predicts. The head of marketing agrees that the total unit volume is likely to be as predicted by the cost analyst. What would be the break-even point of sales in units using the assumptions of the head of marketing?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started