Cheryl Montoya picked up the phone and called her boss, Wes Chan, Vice President of Marketing at Piedmont Fasteners Corporation.
Cheryl: “Wes, I’m not sure how to go about answering the questions that came up at the meeting with the President yesterday.”
Wes: “What’s the problem?”
Cheryl: “The president wanted to know the break-even point for each of the company’s products, but I am having trouble figuring them out.”
Wes: “I’m sure you can handle it, Cheryl. And, by the way, I need your analysis on my desk tomorrow morning at 8:00 sharp in time for the follow-up meeting at 9:00.”
Piedmont Fasteners Corporation makes three different clothing fasteners at its manufacturing facility in North Carolina. Data concerning these products appear below:
| Velcro | Metal | Nylon | |
|
Normal annual sales volume |
100,000 units | 200,000 units | 400,000 units |
| Unit selling price | $1.65 | $1.50 | $0.85 |
| Variable cost per unit | $1.25 | $0.70 | $0.25 |
Total fixed expenses are $400,000 per year.
All three products are sold in highly competitive markets, so the company is unable to raise its prices without losing unacceptably large numbers of customers.
The company has a very effective lean production system, so there is no beginning or ending work in process or finished-goods inventories.
Using the module readings, the Argosy University online library resources, and the Internet, research break-even point and costing systems. Analyze the case based on your research and what you have learned so far in the course.
Be sure to include your calculations in Microsoft Excel format.
Write a 5–6-page report in Word format. Apply APA standards to citation of sources
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