Question: Problem D Reflex Manufacturing Corp, manufactures composters at a unit variable cost of $13. It sells them for $70 each. Annual fixed costs total $648,000.
Problem D Reflex Manufacturing Corp, manufactures composters at a unit variable cost of \$13. It sells them for \$70 each. Annual fixed costs total $648,000. a. How many composters would the company need to sell to make an annual profit of $100,000 ? b. What is the monthly net income at a volume of 2500 units per month? c. If the fixed costs increase by 10%, how much more would the company need to charge to continue to make a monthly profit of $13,500 selling 2500 units per month? d. The company receives a $100,000 government grant as part of a program that promotes green business initiatives. If the company continues to make a monthly profit of $13,500 selling 2500 units per month, how much more could they spend on each unit to use more sustainable materials in the manufacturing? e. A city wants to order 25,000 composters over the next year and is willing to pay $75 per composter, but requires the addition of animal-proof latches on the composters. How much can the company spend on the latches if they want to make a profit of at least 10% of the selling price per composter
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
