Question

In: Economics

(Engineering economics) 4. Assume that you have a company and have to make some decisions based...

(Engineering economics)

4. Assume that you have a company and have to make some decisions based on calculated costs for a line of products. The givens are in the table below:

Givens

Units produced & expected to sell 30,000

Direct labor $300,000

Direct Materials $150,000

Manufacturing Overhead:

Variable portion $100,000

Fixed portion $80,000

Selling and administrative costs:

Variable portion $180,000

Fixed portion $70,000

Based on the above givens determine the following:

a) The manufacturing cost per unit.

b) The break-even selling price per unit.

c) What should be your selling price per unit if you want to make a profit of $100,000?

d) What will be the unit contribution margin based on the selling price determined in question c)?

Assume that you can manufacture an additional 20% of units without increasing the basic operating capacity (no additional equipment, no additional rental space etc.).

e) Determine your new manufacturing cost per unit.

f) Determine your new break-even selling price per unit.

(in excel with formulas please)

Solutions

Expert Solution

Rahul Sunny answered 2 years ago
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