In: Accounting
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 $14,570. The booth will be open 31
hours during the trade show. Ms. Ortega also plans to add a new
product line, ProOffice, which will cost $176 per package. She will
continue to sell the existing product, EZRecords, which costs $103
per package. Ms. Ortega believes that the salesperson will spend
approximately 21 hours selling EZRecords and 10 hours marketing
ProOffice.
Required
a. Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 72 units of EZRecords and 41 units of ProOffice.
b. Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 198 units of EZRecords and 100 units of ProOffice.
(For all requirements, round "Cost per unit" to 2 decimal places.)