Calculate the unit variable cost-total fixed costs

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The following annual information is known about a company:

Material inputs to manufacturing $17,400,000 Marketing and advertising $3,500,000

Management salaries $2,750,000 Production worker wages $9,990,000

Supplies needed for manufacturing $8,345,000 Utilities used in production activities $6,235,000

Utilities used in nonproduction activities $2,222,000 Property taxes $2,100,000

# of units sold 75,132 Unit price $749

1. Calculate the unit variable cost, total fixed costs, unit contribution margin, contribution rate, net income, and break- even in both units and

2. The marketing research manager shows that if the company lowers its price by 5%, unit sales will rise by 5%. Should the company lower its price? Justify your answer.

3. Assume that the price remained the Due to economic pressures, fixed costs are forecasted to rise by 6% and variable costs by 4% next year. At the same level of output, by what percentage must the selling price rise to maintain the same level of net income achieved in (a)?

Reference no: EM132798413

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