Question: The following monthly data in contribution format are available for the MN Company and its only product. Product SD: The company produced and sold 300
The following monthly data in contribution format are available for the MN Company and its only product. Product SD: The company produced and sold 300 units during die month and had no beginning or ending inventories. Required: Without resorting to calculations, what is the total contribution margin at the break-even point? Briefly explain your answer How many units of Product SD must be sold each month to break even? Round you answer to the nearest hundred Management wants to increase sales and feels this can be done by cutting the selling price by RM22 per unit and increasing the advertising budget by RM20.000 per month Management believes that these actions will increase unit sales by 50 percent. Should these changes be made? Explain and support your answer with computations. Ignore information in requirement 3 Management wants to automate a portion of the production process for Product SD The new equipment would reduce direct labor costs by RM20 per unit but would result in a monthly rental cost for the new robotic equipment of RM 10,000 Management believes that the new equipment will increase the reliability of Product SD thus resulting in an increase in monthly sales by 12%. Should these changes be made? Explain and support your answer with computations
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