TYPEWRITTEN ONLY PLEASE. ILL UPVOTE ONLY IF TYPEWRITTEN, COMPLETE, AND CORRECT. DONT ANSWER IF YOU ALREADY ANSWERED THIS, ILL DOWNVOTE. THANK YOU 3.Andy Mendoza makes handcrafted dolls, which he sells at craft fairs. He is consideringmass-producing the dolls to sell in stores. He estimates that the initial investment for plant andequipment will be $25,000, whereas labor, material, packaging, and shipping will be about 10per doll. If the dolls are sold for $30 each, what sales volume is necessary for Andy to breakeven?ANSWER66.Andy Mendoza in Problem 3 is concerned that the demand for his dolls will not exceedthe break-even point. He believes he can reduce his initial investment by purchasing used sewingmachines and fewer machines. This will reduce his initial investment from $25,000 to $17,000.However, it will also require his employees to work more slowly and perform more operations byhand, thus increasing variable cost from 10 to 14 per doll. Will these changes reduce hisbreak-even point?

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Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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A food processing plant consumes 600,000 kW-hr of electrical energy annually and pays an average of P 2.00 per kW-hr. A study is being made to generate its own power to supply the plant the energy required. The power plant installed, costs P 2,000,000; annual operation and maintenance, P 800, 000; other expenses, P 100,000 per year. The life of the plant is 15 years; salvage value at the end of life is P 200,000; annual taxes and insurance 6% of first cost, and the rate of interest is 15 %. Using the sinking fund method for depreciation, determine the ROR of the power plant.
1. RBF, an emerging singer, is getting ready to cut his first album. The cost of recordingthe CD is Php 500,000 but copies are Php 500 apiece. If the album can be sold forPhp1,500 each, (a) how many CDs must be sold to break even? (b)What is thebreakeven point in dollars?RBF is confident that demand for his album will substantially exceed the break-evenpoint computed above. So, Mikey is contemplating having his album at a classier (andpricier) studio. The cost to record the CD would rise to Php 90,000. However, since thisnew studio works with very high volume, production costs would fall to Php 200 per CD.(c) What is the breakeven point for this new process?(d) Compare this process to the process proposed in the pre SHOW COMPLETE SOLUTION.
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S7.25 B Zan Azlett and Angela Zesiger have joined forces to start A&Z Lettuce Products, a processor of packaged shredded lettuce for institutional use. Zan has years of food processing experience, and Angela has extensive commercial food preparation experience. The process will consist of opening crates of lettuce and then sorting, washing, slicing, preserving, and finally packaging the prepared lettuce. Together, with help from vendors, they think they can adequately estimate demand, fixed costs, revenues, and variable cost per 5-pound bag of lettuce. They think a largely manual process will have monthly fixed costs of $37,500 and variable costs of $1.75 per bag. A more mechanized process will have fixed costs of $75,000 per month with variable costs of $1.25 per 5-pound bag. They expect to sell the shredded lettuce for $2.50 per 5-pound bag. d) What is the revenue at the break-even quantity for the mechanized process? e) What is the monthly profit or loss of the manual process if…
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