The Goode and Cooke Company produces several models of frying pans

| April 14, 2018

The Goode and Cooke Company produces several models of frying pans. There is littledifference in the production time required for the various models; the plant is designed toproduce 160 frying pans per eight-hour shift, and there are two shifts per working day.However, the plant does not operate for the full eight hours: the employees take two 12-minute breaks in each shift, one in the first four hours and one in the second four hours; twohours per week are devoted to cleaning the factory and performing maintenance on themachines; one four-hour period every four weeks is devoted to the meeting of the qualitycircle. The plant usually produces about 3,500 frying pans per four-week period. You mayignore holidays in solving this problem. The selling price of the product is $199.95. Thevariable costs per unit are:Labor $60.25Raw material 25.70Purchased component 21.50Variable overhead 17.50The fixed costs total $300,000 per year. Perform a breakeven analysis of this company.a. What is the actual output?b. What is the revenue at the breakeven point?c. Estimate the profit when 9,000 units of the product are sold in a year.

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