The sales manager of Tesla Sales is considering expanding sales by producing three different versions of their product. Each will be targeted by the marketing department to different income levels and will be produced from three different qualities of materials. After reviewing the sales forecasts, the sales department feels that 65% of units sold will be the original product, 20% will be new model #1 and the remainder will be new model #2.
The following information has been assembled by the sales department and the production department.

	Original	Model #1	Model #2
Sales price (per unit)	$    55.00	$    37.00	$    26.00
Material cost	$    21.75	$    15.00	$    10.00
Direct labor	$    10.50	$      7.75	$      5.50
Variable overhead	$      7.25	$      5.00	$      3.00

The fixed costs associated with the manufacture of these three products are $250,000 per year.
Required:
(a) Determine the number of units of each product that would be sold at the break-even point.
(b) Determine the break-even point if the sales estimates are instead 50% original product, 30% model #1, and the remainder model #2.

 

Glen Mills Company is interested in establishing the relationship between utility costs and machine hours. Data has been collected and a regression analysis prepared using Excel. The monthly data and the regression output follow:

 Required:
a. Using Excel, perform a regression analysis on the above data and generate a summary output.
b. What is the equation for utility costs using the regression analysis? 

c. Calculate an estimate of utility costs for a month when 3,000 machine hours are worked.
 

Month Machine Hours Electricity Costs January 2,400 $28,000 February 2,300 $27,500 March 2,500 $29,000 April 2,600 $30,500 May 2,700 $31,000 June 2,800 $32,500 July 2,900 $34,000 August 2,800 $32,500 September 2,700 $31,000 October 2,600 $30,500 November 2,500 $29,000 December 2,400 $28,000