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.