# For each question show the step-by-step work; presenting and submitting the solutions in Excel is re

- September 24, 2021 /
- ecommerce Development, web development, Software Development, Online marketing, Magento, Ecommerce

For each question show the step-by-step work; presenting and

submitting the solutions in Excel is required

Problems

1 Assume

that you have a company and have to make some decisions based on calculated

costs for a line of products You will have to pick your own numbers for the

following costs and for the volume your company produces, and they will be your

givens:

Givens

Units produced & expected to sell

Direct labor

Direct Materials

Manufacturing Overhead:

Variable portion

Fixed portion

Selling and administrative costs:

Variable portion

Fixed portion

Based on your givens determine the following:

a) The

manufacturing cost per unit

b) The

break-even selling price per unit

c) What

should be your selling price per unit if you want to make a profit of $100,000?

d) What will

be the unit contribution marginbased on the selling price determined in

question c)?

2 A

construction firm is evaluating the purchase of a new semi-trailer truck The

truckâs base price is $80,000, but the company will need to modify it at an

additional cost of $20,000 The truck will be sold after three years for

$30,000; and it falls into the MACRS five-year class The purchase of this

semi-trailer will have no effect on the firmâs revenues, but it is expected to

save $45,000 per year in before-tax operating cost, mostly in leasing expenses

The companyâs marginal tax rate (federal plus state) is 40%, and its MARR is

13%

Determine the following:

a) Is this

project acceptable, based on the most likely estimates given in the problem?

Why yes or why not?

b) What is

the break-even interest rate for this project?

c) Will the

project be acceptable if the annual savings will be $40,000 instead of $45,000?

This problem will have to be solved by creating the Income

and the Cash Flow Statements