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Unformatted text preview: raise its prices without losing unacceptable numbers of customers. The company has no work in process or finished goods inventories due to an extremely effective just-in-time manufacturing system. Required: 1. What is the company's overall break-even point in total sales dollars? 2. Of the total fixed costs of $282,000, $18,000 could be avoided if the Frog lure product were dropped, $96,000 if the Minnow lure product were dropped, and $60,000 if the Worm lure product were dropped. The remaining fixed costs of $108,000 consist of common fixed costs such as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely. a. What is the break-even point in units for each product? b. If the company sells exactly the break-even quantity of each product, what will be the overall profit of the company? Explain this result....
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This note was uploaded on 10/20/2010 for the course AD abc123 taught by Professor Cat during the Summer '09 term at City University of Hong Kong.
- Summer '09