1.
Last year Zimmer Co. sold 10,000 units that cost $40,000 to
produce. This cost included $5,000 in fixed computer resource
costs, $10,000 in fixed labor costs, and communication resource
costs at $2.50 per unit. Resource (variable) costs are expected
to be the same next year. Zimmer expects to sell 15,000 units.
The sales manager predicts that next year’s cost will be
$60,000.
Required:
Comment on the sales manager’s cost prediction using CVP
analysis.(Cost-Volume-Profit)