Question 1 (5 points) Data for the next 3 questions: Kim Happy has developed a new product that he is considering the production and selling of it. To proceed with this project, Kim will be renting a small building to rent for $1,200 a month that will house production facilities. One major piece of equipment that will be used to manufacture the product will be rented for $800 a month. Kim purchased all of the other needed tools for $7,200 which will last for two years (depreciation will be $300 per month). Utility cost of building is expected to be $300 per month. Material costs to make the product are estimated at $10.00 per unit. Monthly advertising costs for the product are estimated at $2,000. Kim will be using salespeople for selling the product. Sales commission is $4.00 per unit. Kim has rented a truck for delivery of the products to customer at $450 per month. Kim will be paying himself $6,000 per month as salary. Kim believes that he could produce and sell 2500 units per month. Answer the following independent questions. Compute the minimum selling price per unit in order for Kim to breakeven. Example of answer: 2.10 10.42 Question 2 (5 points) Kim is planning to sell each unit at a price of $22 per unit. Compute the amount of profit that Kim will be making per unit. Example of answer: 2.10 Question 3 (5 points) Kim is planning to sell each unit at a price of $22 per unit. If Kim increases production per month by 500 units (which is within capacity), how much would be the amount of profit per unit? Example of answer: 2.10 Previous Page Next Page Page 1 of 6