To diversify your division's product mix, you are considering expanding your product line in the coming...

  

Transcribed Image Text:

To diversify your division's product mix, you are considering expanding your product line in the coming year by introducing a second product, a standard router. Projected revenue and cost data for the router are as follows: Selling price per router Variable costs per router Direct materials Direct labor Manufacturing overhead Selling expenses $300.00 $25.50 $27.50 $30.00 $7.00 If you decide to introduce this router in FYX2, then no additional manufacturing facilities or capacity would be required. Fixed advertising costs, however, would increase by $125,000 to promote both ethernet repeaters and routers. Your company's marketing department estimates one router would be sold for every three ethernet repeaters during the new product's introductory phase, which is expected to span the next 18 months. a. If your division introduces this router, maintains the current selling price of $360 per unit for ethernet repeaters, and experiences the cost changes described in Req. 2, then how many units of each product would your division need to sell to break even in the coming year? i. Break-even (in units) of ethernet repeaters: ii. Break-even (in units) of routers: iii. Total break-even sales (in combined units): (1 point) (1 point) (1 point) To diversify your division's product mix, you are considering expanding your product line in the coming year by introducing a second product, a standard router. Projected revenue and cost data for the router are as follows: Selling price per router Variable costs per router Direct materials Direct labor Manufacturing overhead Selling expenses $300.00 $25.50 $27.50 $30.00 $7.00 If you decide to introduce this router in FYX2, then no additional manufacturing facilities or capacity would be required. Fixed advertising costs, however, would increase by $125,000 to promote both ethernet repeaters and routers. Your company's marketing department estimates one router would be sold for every three ethernet repeaters during the new product's introductory phase, which is expected to span the next 18 months. a. If your division introduces this router, maintains the current selling price of $360 per unit for ethernet repeaters, and experiences the cost changes described in Req. 2, then how many units of each product would your division need to sell to break even in the coming year? i. Break-even (in units) of ethernet repeaters: ii. Break-even (in units) of routers: iii. Total break-even sales (in combined units): (1 point) (1 point) (1 point)

Answer rating: 100% (QA)

To calculate the breakeven units for ethernet repeaters and routers well first determine the contrib... View the full answer