Question

I need an answer to 10 and 12 only please show me the steps and formulas and explanation.

H Page 7 of 12 Total sales =400,000 + 350,000 Harrington, Inc., produces cutlery sets out of high-quality wood and steel. The company makes a Standard set and a Deluxe set and sells them to retail department stores throughout the country. The Standard set sells for $80. and the Deluxe set sells for $100 The variable expenses associated with each set are given below. Standard Deluxe Variable production cost 20.00 $ 40.00 Sales commission 16.00 $ 20.00 Number of units sold in the last month 5,000 3,500 The company's fixed expenses each month are: Advertising 110,000 stando + Deluxe Depreciation 23,200 (Boxspoot 100 X 3500 Administrative 73.000 3 206,200 TS 750,000 1 Assuming the sales mix remains the same, Harrington's break-even revenue is closest to: A. $ 434,105 Total Stand. Deluxe B. $ 374,909 $ 429,583 sell per unit 480 company $100 D. $ 515,500 E. None of the above. ve Juni (36) [20 +16] (60) [40+20] cmlunit 44 40 3500X40 No tot sold 5000 844 em $220.000 $140,000 $ 360,000 cm. Ratio 360,000 BE revenue - Total fixed cost 750,000 cmnatio 48:A 12 Harrington recently hired a marketing manager, who is keen on restructuring their sales force. Her plan is to change the compensation structure so that sales personnel earn a fixed salary and a commission. If they reduce the commission to 8% for Standard and 10% for Deluxe, then how much (fixed) salary can the company pay to the sales personnel to earn the same income they currently earn? Assume the sales units remain at the original level. 48.000 Current Nor = OM- Fixed cost Sales Commission 75.000 83.000 Stand Deluxe - 360,000 -206,200 D. $ 83,300 16.00 X 8%. 20.00 X 10x E. None of the above. = 153,800 = 14.72 = 18 X100 206,200 429,583 A. B. $ $ $

Answer 1

ode pace $ 130 Total Manufacturing Cost piu let Direct labour Cost be $ x p.u. S. MOH Cost pour xx 1807. 1.500e > 55 + x + 1.5x 130 55+ 2.5 x - 130 X = $30 So direct labour Cost pu. $30 MOH & Box 1 504 $45 Variable MoH = $45-8 x 45 $15 Statement of Contribution Margin 300 ley Sales per Unit Variable Costi Direct Material Direct labour - Variable MOH - Variable selling su Adm. Cost 2 55 30 15 50 150 8000 Units 12,001000 Contribution pou, (X) No. of Units sold Total Contribution Margin

classmate Date Page Amoutin & Total 7501000 240.000 @ -(18) Statement of Present Profict Standard Delux Sales 4001000 350, ao GNC of Predcution tooooo 140,000 al Sales Commission 801000 T01000 CIG X80oo) (80X8500) Contribution | 1201000 fixed Cost 8601000 206800 153800 C Proht -> Now Manager wants to Reduce Sales Commission to 8 % for Standard & lor for Delux, so that the Reduced Amount of Commission can be paid to sales personnel as their fixed Salar... and Prolict shoould also be Same as before Standaid Delen Total 70ooo 150.000 leu Present Sales Commission Cost 801000 Revised variable Sales Commission Cost 80X8 %. XS000 = 32000 fixed Solasy Best of ( Commission 48000 100Xloy.x3500 = 35000 69000 31000 $ 3000 - So Answer is option (C) ie 83000/-
1) Answer of Question 10 = option B: $ 1200000

2) Answer of Question 12 = option C: $ 83000