Data for question numbers 44 to 53 questions: David Happy has developed a new product that he is considering the production and selling of it. To proceed with this project, David will be renting a small building for $1,250 a month that will house production facilities. Utility cost of building is expected to be $400 per month. One major piece of equipment that will be used to manufacture the product will be rented for $600 a month. Material costs to make the product are estimated at $8 per unit. Monthly advertising costs for the product are estimated at $1,000. David will be using salespeople for selling the product. Sales commission is $4.00 per unit. David has rented a truck for delivery of the products to customer at $350 per month. David will be paying himself $5,000 per month as salary. David will be spending about 75% of his time for manufacturing the product; 15% for promotion and delivery of the product; and 10% for the management of the operation. David believes that he could produce and sell 2000 units per month. 44. Compute David's total fixed manufacturing costs, total fixed selling costs, and total fixed administrative costs per month, respectively. Example of Answer: 4350,320,1200 No space, dollar sign, or decimal points 45. Compute David's total variable manufacturing costs, total variable selling costs, and total variable administrative costs per month, respectively? Example of Answer: 4350,320,1200 No space, dollar sign, or decimal points 46. Compute David's total product costs per month. Example of Answer: 4350 No space, dollar sign, or decimal points 47. How much is David's total factory overhead cost per month? Example of Answer: 4350 No space, dollar sign, or decimal points 48. How much is David's total period costs per month? Example of Answer: 4350 No space, dollar sign, or decimal points 49. What should be David's minimum selling price per unit for its product? Hint: the price to breakeven. Example of Answer: 43.30 Two decimal points and no space, dollar sign, or comma. 50. Assume David has set a selling price of $20 per unit for his new product. How many units must be produced and sold each month in order to make $8,000 profit per month? Example of Answer: 4350 No space, dollar sign, or decimal points 51. Assume David has set a selling price per unit of $20 for his new product. David believes hiring a salesperson on salary basis of $5,000 per month could increase the monthly sales considerably. Compute the minimum sales volume units that must be increased in order to justify hiring of the additional salesperson? Example of Answer: 4350 No space, dollar sign, or decimal points 52. Assume David has set a selling price per unit of $20 for his new product and is producing/selling 2,000 units per month. If the sales volume increases by 15% with no change in total fixed expenses, what will be the change in David's net operating income? Example of Answer: +4350 or -4350 No space, dollar sign, or decimal points. Show increase with a "+" and decrease with a "." 53. Assume, based upon David's additional analysis, he has determined the following possible sales scenarios per month with associated probability for his new product: Sales Units. Probability 1,000 30% 2,000 25% 3,000 SD 20% 4,000 15% 5,000 10% Given this data, compute the expected profit of David per month. Hint: Given the data, first compute expected sales units per month. Example of Answer: 4350 No space, dollar sign, or decimal points

Question

25-05-2023
Business

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Data for question numbers 44 to 53 questions: David Happy has developed a new product that he is considering the production and selling of it. To proceed with this project, David will be renting a small building for $1,250 a month that will house production facilities. Utility cost of building is expected to be $400 per month. One major piece of equipment that will be used to manufacture the product will be rented for $600 a month. Material costs to make the product are estimated at $8 per unit. Monthly advertising costs for the product are estimated at $1,000. David will be using salespeople for selling the product. Sales commission is $4.00 per unit. David has rented a truck for delivery of the products to customer at $350 per month. David will be paying himself $5,000 per month as salary. David will be spending about 75% of his time for manufacturing the product; 15% for promotion and delivery of the product; and 10% for the management of the operation. David believes that he could produce and sell 2000 units per month. 44. Compute David's total fixed manufacturing costs, total fixed selling costs, and total fixed administrative costs per month, respectively. Example of Answer: 4350,320,1200 No space, dollar sign, or decimal points 45. Compute David's total variable manufacturing costs, total variable selling costs, and total variable administrative costs per month, respectively? Example of Answer: 4350,320,1200 No space, dollar sign, or decimal points 46. Compute David's total product costs per month. Example of Answer: 4350 No space, dollar sign, or decimal points 47. How much is David's total factory overhead cost per month? Example of Answer: 4350 No space, dollar sign, or decimal points 48. How much is David's total period costs per month? Example of Answer: 4350 No space, dollar sign, or decimal points 49. What should be David's minimum selling price per unit for its product? Hint: the price to breakeven. Example of Answer: 43.30 Two decimal points and no space, dollar sign, or comma. 50. Assume David has set a selling price of $20 per unit for his new product. How many units must be produced and sold each month in order to make $8,000 profit per month? Example of Answer: 4350 No space, dollar sign, or decimal points 51. Assume David has set a selling price per unit of $20 for his new product. David believes hiring a salesperson on salary basis of $5,000 per month could increase the monthly sales considerably. Compute the minimum sales volume units that must be increased in order to justify hiring of the additional salesperson? Example of Answer: 4350 No space, dollar sign, or decimal points 52. Assume David has set a selling price per unit of $20 for his new product and is producing/selling 2,000 units per month. If the sales volume increases by 15% with no change in total fixed expenses, what will be the change in David's net operating income? Example of Answer: +4350 or -4350 No space, dollar sign, or decimal points. Show increase with a "+" and decrease with a "." 53. Assume, based upon David's additional analysis, he has determined the following possible sales scenarios per month with associated probability for his new product: Sales Units. Probability 1,000 30% 2,000 25% 3,000 SD 20% 4,000 15% 5,000 10% Given this data, compute the expected profit of David per month. Hint: Given the data, first compute expected sales units per month. Example of Answer: 4350 No space, dollar sign, or decimal points

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