Question

Rossiter Fittings produces two models of pipe fittings for underwater lines. The two models (RF-12 and RF-25) have the following characteristics, as developed by a product cost analyst: Selling price per unit Variable cost per unit Expected units sold per year RF-12 $ 427 RF-25 $ 567 $ 347 $ 407 3,627 12,493 The total fixed costs per year for the company are $1,164,400. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix is the same at the break-even point, compute the break-even point in units. c. The head of marketing agrees with the data provided by the cost analyst but believes that the sales of the RF-12 model will be double in units from what the cost analyst predicts. The head of marketing agrees that the total unit volume is likely to be as predicted by the cost analyst. What would be the break-even point of sales in units using the assumptions of the head of marketing?

          Rossiter Fittings produces two models of pipe fittings for underwater lines. The two models (RF-12 and RF-25) have the following
characteristics, as developed by a product cost analyst:
Selling price per unit
Variable cost per unit
Expected units sold per year
RF-12
$ 427
RF-25
$ 567
$ 347
$ 407
3,627
12,493
The total fixed costs per year for the company are $1,164,400.
Required:
a. What is the anticipated level of profits for the expected sales volumes?
b. Assuming that the product mix is the same at the break-even point, compute the break-even point in units.
c. The head of marketing agrees with the data provided by the cost analyst but believes that the sales of the RF-12 model will be
double in units from what the cost analyst predicts. The head of marketing agrees that the total unit volume is likely to be as
predicted by the cost analyst. What would be the break-even point of sales in units using the assumptions of the head of marketing?

Rossiter Fittings produces two models of pipe fittings for underwater lines. The two models (RF-12 and RF-25) have the following
characteristics, as developed by a product cost analyst:
Selling price per unit
Variable cost per unit
Expected units sold per year
RF-12
427
RF-25 567
347 407
3,627
12,493
The total fixed costs per year for the company are 1,164,400.
Required:
a. What is the anticipated level of profits for the expected sales volumes?
b. Assuming that the product mix is the same at the break-even point, compute the break-even point in units.
c. The head of marketing agrees with the data provided by the cost analyst but believes that the sales of the RF-12 model will be
double in units from what the cost analyst predicts. The head of marketing agrees that the total unit volume is likely to be as
predicted by the cost analyst. What would be the break-even point of sales in units using the assumptions of the head of marketing?

Added by Marilyn S.

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