# A product at the Jennings Company has enjoyed reasonable sales volumes, but its contributions to profits have been disappointing.

A product at the Jennings Company has enjoyed reasonable sales volumes, but its contributions to profits have been disappointing. Last year, 17,500 units were produced and sold. The selling price is \$22 per unit, c is \$18, and F is \$80,000.a. What is the break-even quantity for this product? (I was able to figure this out, it is 20,000 units)b. Jennings is considering ways to either stimulate sales volumes or decrease variable costs. Management believes that sales can be increased by 30 percent or that c can be reduced to 85 percent of its current level. Which alternative leads to higher contributions to profits, assuming that each is equally costly to implement? (Hint: Calculate profits for both alternatives and identify the one having the greatest profits.)(I’m not sure how to determine what the 30% increase would be in sales or the 85% increase in c?)c. What is the percentage change in the per unit profit contribution generated by each alternative in part b?***Please provide formulas or Excel worksheet for calculations.***

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