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A lawnmower manufacturer has a unit cost of $140 and wishes to achieve a margin of 30% based on selling price.
Use life cycle costs to recommend a system for NEU. Show the calculations to support your recommendations.
10. Westgate division of North Industries manufactures light fixtures sold to consumers through home improvement and hardware stores.
Cost of goods sold represents 40% of net sales.
Marketing expenses include selling expenses, promotion expenses, and freight.
Selling expenses include sales salaries totaling $3 million per year and sales commissions (5% of sales).
The company spent $3 million on advertising last year, and freight costs were 10% of sales.
Other costs include $2 million for managerial salaries and expenses for the marketing function and another $3 million for indirect overhead allocated to the division.
Net sales were $20 million.
Develop a profit-and-loss statement for the Westgate division. Calculate Westgate’s breakeven sales.
