Thompson Company Is Considering the Development of Two Products: Product

question 18

Essay

Thompson Company is considering the development of two products: Product No. 65 or Product No. 66. Manufacturing cost information follows. $\begin{array} { | l | c | c | } \hline & \text { No. } 65 & \text { No. } 66 \\\hline \text { Annual lixed costs } & \$ 220,000 & \$ 340,000 \\\hline \text { Variable cost per unit } & 33 & 25 \\\hline\end{array}$ Regardless of which product is introduced, the anticipated selling price will be $50 and Thompson will pay a 10% sales commission on gross dollar sales. Thompson will not carry an inventory of these items.
Required:
A. What is the break-even sales volume (in dollars) on product no. 66?
B. Which of the two products will be more profitable at a sales level of 25,000 units?
C. At what unit-volume level will the profit/loss on Product No. 65 equal the profit/loss on Product No. 66?

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Definitions:

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Tools that are used in presentations, teachings, or meetings to display information visually, such as charts, maps, and videos.

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Counterpoints or objections raised against a particular stance or theory in a debate or discussion.