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The Prairie Plastic Company (PPC) was considering manufacturing a plastic ski carrier The car-top cartier would completely encase 6 pairs of downhill skis, The marketing
The Prairie Plastic Company (PPC) was considering manufacturing a plastic ski carrier The car-top cartier would completely encase 6 pairs of downhill skis, The marketing plan the PPC took to the bank outlined the following strategy PPC was planning on leasing a warehouse in an industrial park which would be solely dedicated to manufacturing the ski camers. The warehouse would lease for $90,000 a year. Utilities were estimated to be $200 for natural gas for a month, and $400 (month) for city utilities which includes electricity, water, and garbage disposal The plant would require one full-time salaried supervisor at $80.000 per year. Each ski cemier would require $34 worth of raw materials (plastic, dyes, hinges and lock) The plant would employ a number of labourets to make and package the camers. It was estimated that to make and package one ski carrier would cost $16 PPC told the bank that they could make a huge profit if they could sell 700 camers each month to a wholesaler for $80. Thus, the bank should loan them $150,000 which they would pay back at $3,000 a month for 10 years (add this in as a fixed cost). Be the benker - calculate the net profits that they will make if they produce and sell 700 each month. Then calculate the break-even point on a monthly basis. Show all your work and recommend the action the bank should take
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