Question: 6 Document View Module 1 Assisted Assignment M1_A1. The Blankets 'R Us Company sells hand-made blankets. The company is planning to print a catalog and
6 Document View Module 1 Assisted Assignment M1_A1. The Blankets 'R Us Company sells hand-made blankets. The company is planning to print a catalog and send them out in a direct mail campaign. The cost of printing the catalog is $10,958.75 for setting up the presses plus $1.75 to print and mail each catalog. Each catalog that is mailed out generates $8.50 in revenue. (Hint: Use Goal Seek function) a] How many catalogs should be mailed out to break-even? b) How much revenue is generated at the break-even point? c) What is the prot if they mail out 2000 catalogs? M1_A2. Winston Manufacturing is trying to decide whether to refurbish old equipment, upgrade the old equipment or purchase new equipment. The cost to refurbish is $55,000, to upgrade is $95,000, or to purchase new equipment is $175,000.The product sells for $14.50 but the variable costs are dependent on the type on changes that have been made. Using refurbished equipment results in variable cost per unit of $6.85, upgraded equipment results in variable cost per unit of $5.15, and using new equipment results in variable cost per unit of $4.25. The expected sales of the product is estimated to be between 30,000 and 40,000 units. a) How many units need to be sold to break-even if the equipment is refurbished? b) How many units need to be sold to break-even if the equipment is upgraded? c) How many units need to be sold to break-even if the equipment is purchased new? d) What is the prot/loss using refurbished equipment if 40,000 units are sold? e) What is the profit/loss using upgraded equipment if 35,000 units are sold? f) What is the prot/loss using new equipment if 30,000 units are sold? g) which option would you recommend to the manufacturer (you are not using parts d. e. and ffor this answer - ifthe volume was between 30,000 and 40,000 (same volume for all processes) - which option would produce the greatest amount of prot)
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
