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# Bill French - plant capacity 2 million units per year past...

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plant capacity 2 million units per year situations given past year's level of operations 1.5 million units increase sales by 20%, increase to 90% capacity average unit selling price 7.2 increase fixed costs by 60000 per month total fixed costs 2970000 average unit variable cost 4.5 3 basic products plus 50% to dividend of 300000 UCM 2.7 shift in product mix retain 150000 breakeven units 1100000 A- 2/3 of volume next year goal: 600000 profit after taxes breakeven dollars 7920000 C-pick up the 200000 units plus 250000 units, increase the price increase variable costs by 10% across the board B-no change consider company's profit as fixed cost Questions 1 the selling price is constant factor in unit sales increase the variable cost per unit and the total fixed cost is is constant base the calculations on analysis of individual product lines sales mix is constant inventories do not change

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Bill French Case Aggregate A B C Sales at Full Capacity 2,000,000 Actual Sales Volume (units) 1,500,000 600,000 400,000 500,000 Unit Sales Price 7.20 10.00 9.00 2.40 Variable Cost per Unit 4.50 7.50 3.75 1.50
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