You Have Been Provided with the Following Information Regarding the Pharma

question 40

Essay

You have been provided with the following information regarding the Pharma Manufacturing Company:
$\begin{array}{llr} \text {Sales price } &\$25\\ \text { Variable manufacturing cost per unit } &12\\ \text { Variable marketing cost per unit} &3\\ \text { Fixed manufacturing costs } &180,000\\ \text { Fixed administrative costs} &40,000\\\end{array}$


This information is based on forecasted sales of 25,000 units.
Required:
(a) What are the expected operating profits for the upcoming year?
(b) What is the break-even point in units?
(c) What is the break-even point in dollars?
(d) If $80,000 of operating profits is desired, how many units must be sold?
(e) How much in sales dollars is required to generate operating profits of $75,000?

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Definitions:

Compliance-gaining Strategy

Techniques or tactics used to persuade or influence others to agree with or follow a request, command, or rule.

Assertive

Able to pursue one’s own best interests without denying a partner’s rights.

Principled Negotiation Strategy

A method of negotiation that focuses on interests rather than positions, aiming to find mutually beneficial outcomes by separating people from the problem, focusing on interests, inventing options for mutual gain, and using objective criteria.

Objective Criteria

Standards or principles that are based on factual evidence and observable phenomena, used for making judgments or decisions without personal bias.