Your company has developed this new product called Squeaky Doors. Why wait for a door that becomes squeaky when you can have new doors that squeak immediately.

The Marketing Manager is preparing their proposal to the CEO review meeting next week and asked you to help prepare the Break-Even analysis

The manager has supplied you with the following information about the new product:

Materials required

Oak door	$250 Per door
3 hinges	$24 The package of hinges includes 12 hinges and the total cost of the package is $24
Door handle (one handle)	$38 per handle
Squeaky juice and stain (I.5 gallons)	$31 Per gallon

The hinges come in a package of 12 items

Labor required to build the squeaky door

6 hrs

Labor rate is $21 per hour

The company also has the following monthly charges

Rent of production area $3,500

Insurance for area $1,500

Supervision $8,000

Depreciation of equipment $3,200

Advertising for new product $3,800

Other monthly charges $1,200

utilities (consider fixed) $1,900 $23,100

Selling price $750

Required

1 Prepare the break-even units for the project, show you work

2 Prepare an income statement to prove your break-even units

3 Assume the monthly target profit before taxes for this project is $16,000. Compute the number of units required to meet the target profit before taxes.

4 Prepare an income statement to prove the calculated units to achieve the number of units before taxes will equal the profit required.

5 The marketing research is indicating that there is an annual demand of 5,000 squeaky doors and the company will have 29% of the market. Explain if you were the CEO would you accept the new project, based on the data. Please explain