Question

For this activity, you have been hired as a team of consultants on a multi-year basis for a global washer and dryer manufacturer. They currently offer two core washer and dryer sets: a high-end model and an economic model. You are tasked to complete several calculations and present your findings to the company stakeholders. You may use any presentation software (Google Slides, Prezi, PowerPoint, etc.) and your completed presentation should consist of 8 – 12 slides. A copy of the final presentation will be submitted by each member of the group in Unit 7.

1. For your first assignment, management has provided the following revenue and cost information:

	High-End Set		Economical Set
Sales price	$3,500	per unit	$1,000	per unit
Labor	$875	per unit	$250	per unit
Materials	$1400	per unit	$300	per unit
Direct fixed costs	$25,000	per month	$16,500	per month
Allocated fixed costs	$85,000	per month	$85,000	per month

They want a better understanding of their business to make budgeting and sales goals decisions and have asked you to determine their:

1. Contribution Margins for each product line
2. Break-even quantities for each product line
3. Break-even quantities to earn $500,000 per year margin on the high-end line (at the current sales price)
4. Break-even quantities to earn $300,000 per year margin on the economical line (at the current sales price)

They expect the product lines to fully absorb the costs allocated to them. They have also asked that you show each step in your calculations so that they can understand your analysis. (Note: you will be graded on your intermediary values.)

Answer with References please

Answer 1