You work for Bellevue Window Products. While performing an analysis for a new window product, you found a report from last year that provided the following information regarding the manufacture of a similar product: annual production rate = 40,000 units; selling price = $70 per unit; fixed production cost = $240,000 per year; variable production cost = $1,700,000 per year; variable selling expenses = $96,000 per year. As a first-cut, you decide to use this information to estimate (a) the breakeven production rate per year, (b) the company’s profit last year, and (c) the annual production rate that would generate a profit of $1,000,000 per year. What are your estimates?
You work for Bellevue Window Products. While
performing an analysis for a new window product,
you found a report from last year that provided
the following information regarding the
manufacture of a similar product: annual production
rate = 40,000 units; selling price = $70 per
unit; fixed production cost = $240,000 per year;
variable production cost = $1,700,000 per year;
variable selling expenses = $96,000 per year. As
a first-cut, you decide to use this information to
estimate (a) the breakeven production rate per
year, (b) the company’s profit last year, and (c)
the annual production rate that would generate a
profit of $1,000,000 per year. What are your
estimates?
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