The Information That Follows Was Obtained from the Accounting Records

question 35

Essay

The information that follows was obtained from the accounting records of Portofino Manufacturing during a period when the company sold 100,000 units.

Required:
A. Compute the company's per-unit contribution margin and break-even point in units.
B. How many units must Portofino sell to produce a target profit of $550,400?
C. Assume that Portofino was able to reduce the variable cost per unit by $4. What selling price could management charge if it desired to maintain the current break-even point?
D. Depreciation charges of $640,000 are included in the firm's fixed costs of $6,016,000. If these charges were to increase by 10%, what effect, if any, would this cost increase have on the company's contribution margin?

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Definitions:

Effective Teams

Groups of individuals working together efficiently to achieve a common goal through collaboration, clear communication, and complementary skill sets.

Clear Objective

A specific, defined goal that is straightforward and easy to understand, guiding actions and decisions.

Competitive Relationships

Dynamics between entities (such as companies or individuals) in which they vie against each other to achieve superiority or dominance in a certain area.

Extranet

A controlled private network that allows access to partners, vendors, or selected customers, extending certain privileges of the company's intranet.