The managers of Favorite Fish are considering a new project for which they would purchase equipment costing
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A. The fishing supervisor is concerned that variable costs for fish will increase because supplies are dwindling. He would like to know the volume of sales needed if the variable cost per can increases to $3.50.
B. The marketing manager believes that volume of sales could increase by 20% if an annual advertising campaign were undertaken. How much could marketing spend if volume increased by 20%?
C. The manufacturing foreman believes that fixed costs could be 15% higher than estimated.
How much will the price have to increase to accommodate this increase?
D. If taxes increase to 35%, will Favorite Fish still want to develop this product line?
E. Suppose that the capacity could be used for a project that is expected to achieve an after-tax return of 14%. Which project should Favorite Fish undertake?
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Related Book For
Cost Management Measuring Monitoring and Motivating Performance
ISBN: 978-0470769423
2nd edition
Authors: Leslie G. Eldenburg, Susan K. Wolcott
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