### Analysis of Minden Company's New Product**Background Information:**Last year, Minden Company introduced a new product and sold 25,700 units at a price of $100 per unit. The product's variable expenses are $70 per unit, and its fixed expenses are $835,800 per year.**Required Tasks:**1. **Net Operating Income (Loss) Calculation:** - Calculate the net operating income (loss) for the last year. 2. **Break-Even Point Analysis:** - Determine the product’s break-even point in both unit sales and dollar sales. 3. **Marketing Study Impact:** - The company conducted a marketing study estimating that annual sales can increase by 5,000 units for each $2 reduction in the selling price. If reductions are considered in increments of $2 (e.g., $98, $96, etc.), calculate the maximum annual profit. Determine the sales volume and selling price per unit at this maximum profit point. 4. **Break-Even Point with New Selling Price:** - Calculate the break-even point in unit sales and dollar sales using the selling price determined in requirement 3.**Input Fields for Answers:**- **Required 1:** - Explanation of how to calculate net operating income (loss).- **Required 2:** - Explanation of how to compute the break-even point in units and in dollar sales.- **Required 3:** - Procedure to determine the maximum annual profit and the corresponding sales volume and selling price per unit.- **Required 4:** - Calculation procedure for the break-even point using the selling price found in requirement 3.**Interactive Input Area:**Complete the required calculations using the provided tabs:- **Required 1:** Net operating income (loss) calculation.- **Required 2:** Break-even point in units and dollar sales.- **Required 3:** Calculation incorporating marketing study estimates for profit maximization.- **Required 4:** Break-even point calculation with new selling price.**Example Calculation Scenario:**Assume the marketing study's estimates:- Increase in annual sales by 5,000 units per $2 reduction in selling price.- Identify the price reductions in increments of $2 to maximize annual profit.**Graphical Representation:**No immediate graphs or diagrams present.**Output Fields for Calculation Results:**- **Maximum annual profit:** [Input Field] ### Break-even Analysis Tutorial**Break-even Point Calculation Exercise****Instruction:**Complete this question by entering your answers in the tabs below.**Tabs:**- Required 1- Required 2- Required 3- Required 4#### Required 4What would be the break-even point in unit sales and in dollar sales using the selling price that you determined in requirement 3? **(Do not round intermediate calculations.)****Input Fields:**1. Break-even point in units2. Break-even point in dollar sales**Navigation:**- [< Required 3](#)- [Required 4 >](#)**Explanation:**This exercise requires you to determine the break-even point both in terms of unit sales and dollar sales. The break-even point in units is the number of units that need to be sold to cover all fixed and variable expenses. The break-even point in dollar sales indicates the total revenue needed to achieve the break-even point.In order to provide these answers, use the selling price you calculated in a previous step (requirement 3). **Remember:** Do not round any intermediate calculations to maintain accuracy in your final answers.

Formulas Break-even in units = Fixed Costs/Contribution MarginBreak-even in sales = Fixed…

Last year Minden Company Introduced a new product and sold 25,/00 units of it at a price of $100 per unit. The product's variable expenses are $70 per unit and its fixed expenses are $835.800 per year. Required: 1. What was this product's net operating Income (loss) last year? 2. What is the product's break-even point in unit sales and dollar sales? 3. Assume the company has conducted a marketing study that estimates It can increase annual sales of this product by 5,000 units for each $2 reduction in its selling price. If the company will only consider price reductions in Increments of $2 (e.g.. $68. $66, etc.), what Is the maximum annual profit that it can earn on this product? What sales volume and selling price per unit generate the maximum profit? 4. What would be the break-even point in unit sales and in dollar sales using the selling price that you determined in requirement 3? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Assume the company has conducted a marketing study that estimates it can increase annual sales of this product by 5,000 units for each $2 reduction in its selling price. If the company will only consider price reductions in increments of $2 (e.g., $68, $66, etc.), what is the maximum annual profit that it can earn on this product? What sales volume and selling price per unit generate the maximum profit? Show less A

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q