Paranormal Company is considering the development of two products: no. 65 or no. 66, Manufacturing cost...

 

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Paranormal Company is considering the development of two products: no. 65 or no. 66, Manufacturing cost information follows. No. 65 $315,000 No. 66 $532,000 26 Annual fixed costs Variable cost per unit 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 no. 667 B. Which of the two products will be more profitable at a sales level of 27,000 units? C. At what unit-volume level will the profit/loss on product no. 65 equal the profit/loss on product no. 66? Paranormal Company is considering the development of two products: no. 65 or no. 66, Manufacturing cost information follows. No. 65 $315,000 No. 66 $532,000 26 Annual fixed costs Variable cost per unit 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 no. 667 B. Which of the two products will be more profitable at a sales level of 27,000 units? C. At what unit-volume level will the profit/loss on product no. 65 equal the profit/loss on product no. 66?

Answer rating: 100% (QA)

A To calculate the breakeven sales volume in dollars for product No 66 we can use the following form... View the full answer