Calculate how many sausage products you need to sell

Assignment Help Accounting Basics

Reference no: EM131983703

Problem

Sunshine Valley Meat Company produces one of the best sausage products in Pennsylvania. The company's controller compiled the following information by analyzing the accounting records:

1. Meat costs the company $3.25 per pound of sausage produced.
2. Compensation of production employees is $2.25 per pound of sausage produced.
3. Supervisory salaries total $23,000 per month.
4. The company incurs utility costs of $9,000 per month plus $0.35 per pound of sausage produced.
5. Insurance and property taxes average $6,400 per month.

Required:

1. Calculate how many sausage products you need to sell in order to make $10,000 target profit for the year.

2. Develop a business strategy which will involve at least three changes in some (or all) of the following attributes: (1) variable cost per sausage product, (2) total fixed cost, and (3) selling price per sausage product.

Reference no: EM131983703

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