Chat with us, powered by LiveChat Rainbow company produces specialty water bottles and sells them to retailers who sell them directly t | WriteDen

Rainbow company produces specialty water bottles and sells them to retailers who sell them directly t

  

Rainbow company produces specialty water bottles and sells them to retailers who sell them directly to consumers. The water bottles are high quality bottles produced for outdoor activities such as camping. In December 2019, Jackson Triggs, the president of the company, was considering an alternative marketing plan for 2020 that was presented to her by Stephanie Terril, the marketing manager. Based on sales from January through December 2019, Jackson expected that 2020 sales would amount to 300,000 units. The alternative marketing plan is presented below: 2020 Marketing Plan: “At the present time, we sell the product to retailers for $8.00 per bottle. Retailers generally charge the consumers between $9 and $9.50. If we cut our selling price to retailers to $7.50, I expect that the product will do much better. Their increased markup will give them the incentive to display our product more prominently and to promote it more vigorously to customers. We should support this strategy by supplying more promotional materials to retailers, which I expect would be an increase of $4,600 in Advertising and Promotion costs. Based on the price cut and the increase in advertising and promotion, I expect that we will be able to boost our sales volume by 18 percent to 348,100 units in 2020.” Jackson received cost data from the company’s CFO, Ken Choi. Ken expects that the cost data below are also reliable estimates for 2020 for a production volume up to 400,000 units. Beyond 400,000 units, the company would have to rent additional machines (with a capacity of 100,000 units each), which would increase fixed manufacturing overhead costs by $50,000 per machine.

2019 Cost Data

Manufacturing Costs for water bottles (based on production volume of 295,000 units):

Direct Materials: $0.85 per unit

Direct Labor: $9.75 per hour (each worker can make 20 units in 1 hour)

Packaging: $0.70 per unit

Variable Manufacturing Overhead: $1.45 per unit

Fixed Manufacturing Overhead: $550,000

Selling and Administrative Costs for bottles (based on sales volume of 295,000 units):

Sales Commissions: $0.80 per unit

Shipping Costs: $0.50 per unit

Advertising and Promotion (fixed): $180,000

Fixed Selling and Admin Expenses: $270,000

Using the information on page 1, answer the following questions. Include all costs (manufacturing costs and selling and administrative costs) in your calculations. 

Q1. Using the 2019 cost data, determine the 2019 break-even point in number of bottles for the company, assuming no changes to selling price or costs. For full credit, please show all of portions of your calculations.  Q 2. Assuming the selling price and cost changes in the Marketing Plan are adopted: prepare a CVP Income Statement (total and per unit) for 2020, assuming sales and production increase by 18% as outlined in the Marketing Plan.

HOW OUR WEBSITE WORKS

Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of 
HIGH QUALITY & PLAGIARISM FREE.

Step 1

To make an Order you only need to click ORDER NOW and we will direct you to our Order Page at WriteDen. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
 Deadline range from 6 hours to 30 days.

Step 2

Once done with writing your paper we will upload it to your account on our website and also forward a copy to your email.

Step 3
Upon receiving your paper, review it and if any changes are needed contact us immediately. We offer unlimited revisions at no extra cost.

Is it Safe to use our services?
We never resell papers on this site. Meaning after your purchase you will get an original copy of your assignment and you have all the rights to use the paper.

Discounts

Our price ranges from $8-$14 per page. If you are short of Budget, contact our Live Support for a Discount Code. All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.

Please note we do not have prewritten answers. We need some time to prepare a perfect essay for you.