Paranormal Company is considering the development of two products: number 65 or number 66. Manufacturing cost...

 

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Paranormal Company is considering the development of two products: number 65 or number 66. Manufacturing cost information follows. Annual fixed costs Variable cost per unit Number 65 Number 66 $ 285,000 30 $ 442,000 20 Regardless of which product is introduced, the anticipated selling price will be $60, and the company will pay a 10% sales commission on gross dollar sales. Paranormal will not carry an inventory of these items. Required: A. What is the break-even sales volume (in dollars) on product number 66? B. Which of the two products will be more profitable at a sales level of 21,000 units? C. At what unit-volume level will the profit/loss on product number 65 equal the profit/loss on product number 66? A. Break-even sales B. Profitable at a sales level of 21,000 units: Number 65 Number 66 C. Unit-volume level units Paranormal Company is considering the development of two products: number 65 or number 66. Manufacturing cost information follows. Annual fixed costs Variable cost per unit Number 65 Number 66 $ 285,000 30 $ 442,000 20 Regardless of which product is introduced, the anticipated selling price will be $60, and the company will pay a 10% sales commission on gross dollar sales. Paranormal will not carry an inventory of these items. Required: A. What is the break-even sales volume (in dollars) on product number 66? B. Which of the two products will be more profitable at a sales level of 21,000 units? C. At what unit-volume level will the profit/loss on product number 65 equal the profit/loss on product number 66? A. Break-even sales B. Profitable at a sales level of 21,000 units: Number 65 Number 66 C. Unit-volume level units

Answer rating: 100% (QA)

A To find the breakeven sales volume in dollars for product number 66 we need to calculate the total ... View the full answer