Breeden Security Memo - TO Dr Ross Roberts FROM Lillian...

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TO: Dr. Ross Roberts FROM: Lillian Swaim DATE: Tuesday, October 22, 2013 SUBJECT: Breeden Security, Inc. Dr. Roberts, We have attached our review of Breeden Security, Inc. but there are some points that we would like to bring to your attention and further explain to show the trends that we have noticed in reviewing the sales and costs associated with RC1 and RC2. When looking at part A of the case, we used the ratio of 2 RC1’s for every 1 RC2. We knew that the target revenue was $295,000, our fixed costs were $131,000, and our variable costs for RC1 and RC2 were $10.31 and $12.18 respectively. Using this information, we found that we will need to produce 8,676 units of RC1 and 4,338 units of RC2 in order for the company to breakeven, and also found that in order to have profits of $210,000 we need to sell 22,583 units of RC1 and 11,292 units of RC2. Also in part A, we differentiated between making and selling 8,000 units of RC1 and 4,000 units of RC2, and making 10,000 units of RC1 but only selling 8,000 of them and making 5,000 units of RC2 but only selling 4,000 of them. In both cases, Breeden Security, Inc. will have a net loss, but if they
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  • Fall '13
  • MarnieMatthews
  • Cost Accounting, BREEDEN SECURITY, Breeden Security, Inc.

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