Question

Plush Decor, Inc., is considering three possible countries for the sole manufacturing site of its newest area rug: Italy, Spain, and Singapore. All area rugs are to be sold to retail outlets in the United States for $ 200 per unit. These retail outlets add their own markup when selling to final customers. Fixed costs and variable cost per unit ( area rug) differ in the three countries.


1. Compute the breakeven point for Plush Decor, Inc., in each country in
(a) Units sold
(b) Revenues.
2. If Plush Decor, Inc., plans to produce and sell 80,000 rugs in 2014, what is the budgeted operating in-come for each of the three manufacturing locations? Comment on theresults.


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  • CreatedMay 14, 2014
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