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You are in the business of making and selling Bogus Bovine Wasteproducts (BBWs). Each BBW sells for $150,000 and you have the following manufacturing costs:
You are in the business of making and selling Bogus Bovine Wasteproducts (BBWs). Each BBW sells for $150,000 and you have the following manufacturing costs: Direct materials consist of $500 of unrefined BW for each BBW Direct labor costs $100,000 per BBW Defamation liability insurance costs $15,000 per BBW Rent is $120,000 per year Miscellaneous administrative costs are $60,000 per year Political bribes are $1,200,000 per year A. How many BBWs do you need to make and sell per year to breakeven? B. If you buy a better grade of unrefined BW for $3,000 (rather than $500), you can reduce your annual political bribe cost to $1,036,000 from $1,200,000. How many BBWs do you need to make and sell per year to breakeven if you choose this option? C. You think you can sell between 45 and 70 BBWs each year. What income will you make under the higher bribe/lower-unrefined-BE cost option if you sell 50 BBWS? D. What income will you make under the lower bribe/higher-unrefined-BE cost option if you sell 50 BBWs? E. What income will you make under the higher bribe/lower-unrefined-BE cost option if you sell 69 BBWs? F. What income will you make under the lower bribe/higher-unrefined-BE cost option if you sell 69 BBWs
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