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Toyota Motor Corporation uses mixed costing for its automobile production. In September 2038, the company incurs the following costs for two product lines (Sedan and
Toyota Motor Corporation uses mixed costing for its automobile production. In September 2038, the company incurs the following costs for two product lines (Sedan and SUV):
- Fixed Costs: $100,000,000
- Variable Costs (Sedan): $50,000 per unit
- Variable Costs (SUV): $70,000 per unit
- Selling Price (Sedan): $80,000 per unit
- Selling Price (SUV): $110,000 per unit
Requirements:
- Classify each cost as fixed or variable.
- Perform a cost-volume-profit analysis for each product line.
- Calculate the breakeven point and contribution margin for each product.
- Analyze the profitability of each product line.
- Recommend strategic actions based on the CVP analysis.
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