Reference no: EM132509696
In the month of February Mr. Ataullah has taken the decision to introduce a new product in his product line. He wants to introduce a new ball pen named 'Captain Bail Pon' in the market. He has already done his market research. He wants your insights regarding the new product. He also has shared his thought regarding the new product that he wants to earn a minimum profit of BDT 200 000 from its first years of operation.
You also gathered the following information from accounts division:
a. The existing production unit at Keranigonj will also be used for production of Ball Pen. production wit can be sold at BDJ 200,00 0.
b. 5 production machines should be purchased each having a market value of BDT. 500.090 and useful life of 5 years.
c. Per unit Direct Material cost is DDT 2.50 and Direct Labor cost is BDT 0.75. Variable Manufacturing Overhead is BDT 0.25 per unit.
d. The sales center of plastic goods will be used to sell the new product. But about 20 'show-cases' will be needed to display the product. The customized show- cases will cost BDT. 20,000 per show-case. These show cases will be depreciated in straight line basis in the next 3 years. Selling commission per unit is BDT 0. 15.
e. Selling price per unit is fixed at BDT 6.
Question1 : Calculate Break-Even Quantity and Break-Even Sales for 'Captain Ball Pen'.
Question2 : Calculate the Unit sale.