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What effect would reduction in material cost

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Problem 1: The purchasing manager for Forster's Fashion Bags has been able to purchase the materials for its signature handbags for $3 less per bag. If everything is kept the same, what effect would this reduction in material cost have on the breakeven point for Forster's Fashion Bags?

Problem 2: Now, assume that the sales manager decides to reduce the selling price of each handbag by $3. What would be the net effect of both changes be on the breakeven point in units for Forster's Fashion Bags?

Problem 3: Would you recommend a different approach to the purchasing manager if the results are not favorable to the organization? Please explain.

Reference no: EM132742371

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