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Will leave Good review!! Comp Inc. sells three products. Income statement information for the three products for the most recent year is given below: Product
Will leave Good review!! Comp Inc. sells three products. Income statement information for the three products for the most recent year is given below: Product A Product B Product C Selling price per unit ..... $25 $20 $18 Costs: Variable costs ............ $130,000 $156,000 $ 72,000 Advertising ............... $ 23,500 $ 28,600 $ 23,400 Rent ...................... $ 12,100 $ 14,400 $ 12,900 Supervisor's salary ....... $ 33,100 $ 31,200 $ 31,400 Property taxes ............ $ 7,000 $ 3,000 $ 2,000 Units sold ................. 7,000 13,000 10,000 The rent is allocated to the three products equally and the property taxes are allocated based on the square footage each product uses in the factory. Comp Inc. is considering eliminating Product A. If Product A is eliminated, the space currently being used to produce Product A can be rented out for $17,000 per year. Calculate the number of units of Product A that would need to be sold next year in order for Comp Inc. to be economically indifferent between dropping and keeping Product A.
A Company produces and sells four products. Information about these products for August is given below: Product #1 Product #2 selling price per unit $63 $81 variable costs per unit $29 $42 number of units sold 3,300 4,100 Product #3 Product #4 selling price per unit $62 $71 variable costs per unit $34 $42 number of units sold 3,600 5,100 The fixed costs for August amounted to $320,120. In order to improve profitability, The Company made the following changes in September: 1. Adjusted the selling price of Product #2. 2. Automated a portion of the production process related to Product #2. This reduced the variable costs of Product #2 by $3 per unit. 3. Increased the advertising for Product #2 by $275,037. These changes resulted in the number of units of Product #2 that were sold doubling. However, these changes also resulted in the sales of Product #1 decreasing by 25% as some customers started buying Product #2 instead of Product #1. Assume the sales of Product #3 and Product #4 were not impacted by these changes. Calculate the selling price per unit for Product #2 needed in September in order for the September net income to be 20% larger than the August net income.
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