Question

Hannah Ortega is considering expanding her business. She plans to hire a salesperson to cover trade shows. Because of compensation, travel expenses, and booth rental, fixed costs for a trade show are expected to be $9,250. The booth will be open 25 hours during the trade show. Ms. Ortega also plans to add a new product line, ProOffice, which will cost $177 per package. She will continue to sell the existing product, EZRecords, which costs $101 per package. Ms. Garcia believes that the salesperson will spend approximately 15 hours selling EZRecords and 10 hours marketing ProOffice.

Required

1. Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 84 units of EZRecords and 54 units of ProOffice.

2. Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 200 units of EZRecords and 109 units of ProOffice.

(For all requirements, round "Cost per unit" to 2 decimal places.)

	EZRecords ProOffice a. Total cost of sales Cost per unit b. Total cost of sales Cost per unit

Answer 1

a)

	EZ Records	Pro Office
Total Cost of Sales	(84 x 101) + (9,250 x 20/30)	14,650.67	((54 x 177) + (9,250 x 10/30)	12641.33
Cost Per unit		174.41		234.10

b)

	EZ Records	Pro Office
Total Cost of Sales	(200 x 101) + (9,250 x 20/30)	26,366.67	((109 x 177) + (9,250 x 10/30)	22376.33
Cost Per unit		131.83		205.29