In: Accounting
Contact WheelsLtd manufactures and sells car tyres. It has developed two new models, ‘Z-Grip’ and ‘Y-Slip’, for use in long distance driving which will be launched in January 2021.These will be sold exclusively in the company’s new car-mart. The annual fixed cost is $180,000. From a pre-launch market survey, it expects that sixty percent of the potential customers prefer ‘Z-Grip’ while forty percent prefer ‘’Y-Slip’. The following information has been extracted to facilitate a Cost-Volume-Profit analysis:
Z-Grip |
Y-Slip |
|
Selling Price per tyre |
$300 |
$400 |
Variable Cost per tyre |
$80 |
$120 |
Sales commission per unit |
$20 |
$30 |
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