Required (4 marks each):Note for parts b to d - show all calculations...
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Required marks each:Note for parts b to d show all calculations to support your conclusion, as the majority of the marks are for the calculationsa. Without resorting to calculations, what is the total contribution margin at the breakeven point? Explain why you chose the number for full marks.b Management is contemplating the use of plastic gearing rather than metal gearing in Product SW This change would reduce variable costs by $ The company's marketing manager predicts that this would reduce the overall quality of the product and thus would result in a decline in sales to a level of units per month. Should this change be made?c Assume that Challenger Company is currently selling units of Product SW per month. Management wants to increase sales and feels this can be done by cutting the selling price by $ per unit and increasing the advertising budget by $ per month. Management believes that these actions will increase unit sales by Should these changes be made?d Assume that Challenger Company is currently selling units of Product SW Management wants to automate a portion of the production process for Product SW The new equipment would reduce direct labour costs by $ per unit but would result in a monthly rental cost for the new robotic equipment of $Management believes that the new equipment will increase the reliability of Product SW thus resulting in an increase in monthly sales of Should these changes be made?Ready
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