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Robin Simmons is ready to complete a cost-volume-profit analysis for 2016 for the Stellar Packaging Products manufacturing plant to determine if the break-even point is achieved, given the expected decline in volume. Specific costs for production of 500,000 units include the following:
Stellar Packaging Products
Variable Costs Total
Fixed Costs Total
Raw materials
%bodyamp;nbsp; 400,000
Direct manufacturing labor
%bodyamp;nbsp; 200,000
Indirect manufacturing labor
%bodyamp;nbsp; 105,000
Factory Insurance & Utilities
%bodyamp;nbsp; 63,000
Depreciation -- Machinery and factory
%bodyamp;nbsp; 38,500
Repairs and maintenance -- factory
%bodyamp;nbsp; 28,000
Selling, marketing and distribution expenses
%bodyamp;nbsp; 40,000
%bodyamp;nbsp; 80,000
General and administrative expenses
%bodyamp;nbsp; 120,000
There are no beginning or ending inventories. The total sales for 500,000 units produced are $2,000,000.
Instructions:
Answer the following questions given the fact pattern above, showing all calculations.
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