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Answered: - please can provide me with the to this cost accounting question.


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3-43 CVP analysis, decision making. (M. Rajan, adapted) Tocchet Company manufactures CB1, a citizens?
band radio that is sold mainly to truck drivers. The company?s plant in Camden has an annual capacity
of 75,000 units. Tocchet currently sells 60,000 units at a selling price of $148. It has the following cost
structure:
Variable manufacturing costs per unit $ 63
Fixed manufacturing costs 1,012,000
Variable marketing and distribution costs per unit 15
Fixed marketing and distribution costs 780,000
Required
(Consider each question separately.)
1. Calculate the breakeven volume in units and in dollars.
2. The marketing department indicates that decreasing the selling price to $140 would stimulate sales to
70,000 units. This strategy will require Tocchet to increase its fixed costs, although variable costs per
unit will remain the same as before. What is the maximum increase in fixed costs for which Tocchet
will find it worthwhile to reduce the selling price?
3. The manufacturing department proposes changes in the manufacturing process to add new features
to the CB1 product. These changes will increase fixed manufacturing costs by $150,000 and variable
manufacturing costs per unit by $3.20. At its current sales quantity of 60,000 units, what

 


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