Question

Hannah Ortega is considering expanding her business. She plans to hire a salesperson to cover trade shows. Because of compensation, travel expenses, and booth rental, fixed costs for a trade show are expected to be $9,840. The booth will be open 24 hours during the trade show. Ms. Ortega also plans to add a new product line, ProOffice, which will cost $173 per package. She will continue to sell the existing product, EZRecords, which costs $94 per package. Ms. Garcia believes that the salesperson will spend approximately 14 hours selling EZRecords and 10 hours marketing ProOffice. Required a. Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 70 units of EZRecords and 45 units of ProOffice. b. Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 203 units of EZRecords and 93 units of ProOffice. (For all requirements, round "Cost per unit" to 2 decimal places.) EZRecords ProOffice Total cost of sales Cost per unit b. Total cost of sales Cost per unit

Answer 1

Answers

		EZRecords	ProOffice
a	Total Cost of sales	$12,320	$11,885
	Cost per unit	$176.00	$264.11
b	Total Cost of sales	$24,822	$20,189
	Cost per unit	$122.28	$217.09

--Workings

		EZRecords	ProOffice
a	Total Cost of sales	=+(70*94)+(9840*14/24)	=+(45*173)+(9840*10/24)
	Cost per unit	=12320/70	=11885/45
b	Total Cost of sales	=+(203*94)+(9840*14/24)	=+(93*173)+(9840*10/24)
	Cost per unit	=24822/203	=20189/93