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You work in the finance department of McFly Hoverboards, Marty McFly has asked you to review some information for a new product for the company.
You work in the finance department of McFly Hoverboards, Marty McFly has asked you to review some information for a new product for the company. He has asked you to determine some breakeven information, develop a forecast for future sales with the product, and discuss some working capital management issues related to the project. PART 1 - McFly Hoverboards manufactures hoverboards. Recently McFly Hoverboards developed a new over the water hoverboard. Information regarding the manufacturing process product is below. (30 points) - The planned retail is $120.00. Raw Materials for one hoverboard are $50.00 Assembly time is expected to be 105 minutes per unit. Production labor is paid at $14.00 per hour. Operating expenses are as follows: o Salaries - $2,400 per week o Insurance - $800 per quarter o Rent - $1,600 per month Utilities - $1,200 per month Based on the above information do the following: 1. Create a break even table of the given data. 2. What is the contribution margin for each hoverboard sold? 3. Determine how many hoverboards must be sold per month to break even. Show your math. 4. Determine break even dollars. Show your math. 5. The company would like to make a $30,000 monthly profit on the sale of hoverboards. How many hoverboards need to be sold for that to happen? What are the dollar sales representing this? 6. How many employees need to be hired to accomplish this? (assume 8 hour workday X 5 days per week)
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