Question: Hi can i get some help for this question: Information: Product Sale price Cost price Sales commission (based on sale price) Custom design set $3,900

Hi can i get some help for this question:

Information:

Product Sale price Cost price Sales commission (based on sale price)
Custom design set $3,900 $2,400 5%
Limited edition set $2,900 $1,900 2%
Product Sale price Variable cost (alloy set) Variable cost (sales commission) Total variable cost Contribution Margin Weighted sales mix Weighted average contribution margin
Custom design set $3,900 $2,400 $195.00 $2,595.00 $1,305.00 0.3 $391.50
Limited edition set $2,900 $1,900 $58.00 $1,958.00 $942.00 0.7 $659.40
Fixed costs $57,000.00
Weighted average contribution margin $1,050.90
Break even total (units) 54.24
Custom design set breakeven (units) 16.27
Limited edition sets breakeven (units) 37.97

QUESTION:

The sales price, variable costs and fixed costs are all based on estimates. Shine Ltd management would like to see how much the breakeven point and target sales changes based on the following independent scenarios:
a The Australian dollar depreciates & Custom Alloy wheel set cost price increases to $3,000 & Limited edition set to $2,500
b Warehouse unit rent increases, raising the fixed costs to $79,000 per month
c Economic growth decreases and 80% of sales are now Limited edition sets
d A competitor enters the Australia market selling imported wheels from Detroit, Michigan. To remain competitive Shine Ltd is forced to reduce the price of Custom design sets to $3,000 and Limited edition sets to $2,000

TIP: Managers would like to compare the relevant numbers for each scenario. To keep a record of each scenario, copy and paste the requirements you have completed above into the relevant scenario worksheets below. You can then change the numbers as required to see how the breakeven and target sales change for each scenario. To copy, highlight the relevant area, right click on the mouse, select copy, click on the relevant requirement tab below, click on cell A1, right click the mouse and select paste.

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