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How much more can the company spend on advertising

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Reference no: EM132614782

Annual costs for the following manufacturer of custom glass candle holders are as follows:

Direct Materials                   $18.50per unit

Production Supplies           $1.10per unit

Depreciation               $36,000fixed

Advertising                $45,000fixed

Direct Labor          $4.25per unit

Selling Costs               $2.80per unit

Other Fixed Costs         $11,400fixed

Other Variable Costs                 $1.95per unit

The product is expected to be sold for $55.00 each.

Question 1: How many candle holders must the company sell to break even?

Question 2: How many candle holders must the company sell to earn a profit of $70,224?

Question 3: If advertising costs rise by $40,000, how many products must be sold to earn a profit of $139,520?

Question 4: Assuming the original information in the instructions to this quiz, and sales volume of 10,000 units, what price must the company charge to earn a profit for the year of $131,600?

Question 5: Assuming the original information in the instructions to this quiz, and sales volume of 15,000 units, how much MORE can the company spend on advertising to earn a profit of $251,000, assuming selling price is lowered to $52.00.

Reference no: EM132614782

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