Answer:
Can you say what is the error
hope that helps you
please mark brainliest
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A bookstore organizes its stock by topic. It has a mystery novel section, a romance novel section, a how-to-do-it section, a travel book section, etc. The bookstore is obviously using a _____ presentation. horizontal style/item usage book cover
Answer:
The correct answer is the second option: Item usage book cover.
Explanation:
To begin with, in the field of business management that focus specifically in the bookstores when they talk about an "item usage book cover" presentation it means that the managers decide to organize the stock by topic and that is related to the book cover and therefore to its item so that is why that they would have a mystery novel section, a romance novel section and much more of that. So every customer will understand inmediately that the bookstore is structured by the item of the book that could be easily recognize sometimes with its cover.
planning practices are different from organization to organization. do you agree?
explain
Answer:
yes I agree
Explanation:
because different organizations manufacture or provide different goods and services so it's not possible for them to have the same planning practices take for instance an organization that deals with the provision of food to refugees and an organization that deals with the manufacturing of goods these two organizations will plan differently on how to go about with there businesses.
I hope this helps
The following transactions took place in Boeing Business.
01.03.2021 - Purchase of goods costing Rs. 150000 from Airbus
company on credit.
05.03.2021 - Return of goods costing Rs. 30000 to Airbus
20.03.2021 - Sale of goods costing Rs. 100000 for Rs. 160000 on
credit
29.03.2021 - Payment of sales commission of Rs. 10000
02.04.2021 – Settlement of the full amount due to Airbus
What is the accounting equation which shows the net impact of the
above transactions in Boeing business as at 31.03.2021?
Assets
Liabilities
+
Equity
Answer:
1) Dr: Goods/Inventory (Asset increase) 150000
Cr: Payable (Liability increase) 150000
2) Dr: Payable (Liability decrease) 30000
Cr: Goods (Asset decrease) 30000
3) Dr: Payable (Liability decrease) 30000
Cr: Goods (Asset decrease) 30000
4) Dr: Receivables (Asset increase) 160000
Cr: Goods (Asset Decrease) 100000
Cr: Profit and loss (Equity increase) 60000
5) Dr: Commission Expense (Equity decrease) 10000
Cr: Cash (Asset Decrease) 10000
6) Dr: Payable (Liability decrease) 120000
Cr: Cash (Asset Decrease) 120000
Tamarisk, Inc. issued 20800 shares of $1 par common stock for $40 per share during 2022. The company paid dividends of $50000 and issued long-term notes payable of $458000 during the year. What amount of cash flows from financing activities will be reported on the statement of cash flows
Answer:
$1,240,000
Explanation:
Calculation to determine the amount of cash flows from financing activities will be reported on the statement of cash flows
Cash flow from Financing activities
Issue of common stock $832,000
(20800 shares × $40)
Add Issued of long term notes payable $458,000
Less: Dividend paid -$50,000
Net Cash flow from Financing activities $1,240,000
Therefore the amount of cash flows from financing activities will be reported on the statement of cash flows is $1,240,000
You purchase a digital camera for $495.00, a case for $38.50, a zoom lens for $216.45, and a
memory card for $74.95. The sales tax is 7.15 percent.
12. What is the total price of your purchase before sales tax?
A. S824.90
B. $749.95
C. $883.88
D. $801.25
which of the following quotes is the best way to tell your boss that you can't accept a new assignment right now?
a. I would like to work on this. but if I take this on I won't be able to meet my current deadline.
b. you know I already have this other deadline
c. I just don't know if I can get this all done
d. I don't have time sorry
Answer:
a
Explanation:
it would be fine hopefully
The correct quotes are the best way to tell your boss that you can't accept a new assignment right now is "I would like to work on this. But if I take this on, I won't be able to meet my current deadline". Thus, option (a) is correct.
What is assignment?An assignment is a judicial word used in the context of contract and property law. Assignment is the process through which one person, the assignor, passes rights or advantages to another, the assignee.
Assignment is providing someone to a specific job or piece of labor, or assigning someone to a specific location to complete a job.
The simplest approach to inform your supervisor that you can't take on a new job right now is to say, "I'd want to work on this, but if I take it on, I won't be able to fulfill my present deadline." Therefore, it can be concluded that option (A) is correct.
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blank is a crucial factor to small business success A. Location B. Financing C. Advertising D. legal advice
Answer:
Advertisement
Explanation:
Advertising
All of the following will improve a firm's liquidity position except: Answer A)increase long-term debt and invest the money in marketable securities B)increase accounts receivable turnover C)increase inventory turnover D)increase the average collection period
Answer:
i think answer B is right
but i am not sure
The parts of the process cost summary include:______.
a. cost charged to each job.
b. costs charged to departments.
c. cost assignment and reconciliation.
d. equivalent units of production.
Answer:
b. costs charged to departments. c. cost assignment and reconciliation. d. equivalent units of productionExplanation:
In Process costing, the company involved is producing a large amount of goods and services that are exactly the same. In order to assign costs therefore, the company will assign costs to all the products instead of individually.
Costs would be charged to various departments because they produce the goods so the entire department cost has to be assigned and reconciled with with the department that produce the goods. When the company only managed to partially complete the production of a good, they will still have to assign costs and so use equivalent units of production to do so.
Which of the following is true of good salespeople?
A. They know how to oversell their product so the customer can't say no.
B. They have tenacity but know when to walk away and move on to the next sales prospect.
C. They make promises they may not be able to keep in order to secure a sale.
D. They don't leave voice mail messages.
Answer:
Correct answer is A, They know how to oversell their product so the customer can't say no. Explanation: Good salespeople are those who sell more and more of their company's product.
If you want to melt a rock, even partially, there are three methods you can employ. Which of the following is not a way that melting is triggered in rocks in the Earth?
a. adding water
b. adding heat
c. releasing pressure
d. removing water
Answer:
D
Explanation:
There are three basic ways that rocks melt to form the lavas that erupt from volcanoes: decompression, addition of volatiles, and conduction.
but the question asked "which of the following is NOT a way"I hope this helped! have a great day!Cioffi Manufacturing Company incorporates standards in its accounts and identifies variances at the time the manufacturing costs are incurred. Journalize the entries to record the following transactions:
a. Purchased 2,450 units of copper tubing on account at $52.00 per unit. The standard price is $48.50 per unit.
b. Used 1,900 units of copper tubing in the process of manufacturing 200 air conditioners.
Answer:
A. Dr Materials $18,825
Dr Direct Materials Price Variance $8,575
Cr Accounts Payable $127,400
B. Dr Work in Process $97,000
Cr Direct Materials Quantity Variance $4,850
Cr Material 92,150
Explanation:
Preparation of the journal entries
A. Dr Materials $18,825
(2,450*$48.50 per unit)
Dr Direct Materials Price Variance $8,575
[2,450*($52.00 per unit-$48.50 per unit)]
Cr Accounts Payable $127,400
(2,450*$52.00 per unit)
B. Dr Work in Process $97,000
(200*10 units *$48.50)
Cr Direct Materials Quantity Variance $4,850
(2,000 units – 1,900 units) × $48.50
Cr Material 92,150
(1,900 × $48.50 )
In factorial designs, the response produced when the treatments of one factor interact with the treatments of another in influencing the response variable is known as _____.
a. replication
b. interaction
c. the main effect
d. a factor
Answer: B. Interaction
Explanation:
A factorial design enables the effect of several factors and the interactions that exist between them to be determined.
In factorial designs, the response produced when the treatments of one factor interact with the treatments of another in influencing the response variable is referred to as interaction.
Therefore, the correct option is B.
Suppose that an additional 350 hours per week can be obtained from the milling machines by working overtime. The incremental cost would be $2.00 per hour. What would be the allowable increase(from the excel sensitivity report) in overtime when compared to additional hours that can be obtained
Solution :
It is given that :
Additional time obtained per week from milling machines = 350
The incremental cost = $ 2 per hour
Therefore, the allowable increase for milling operation is 400.
This indicates that we can accommodate additional constraint RHS of [tex]200[/tex] hours.
Also we have to consider the impact on the profit of 2.25 which is an incremental cost of [tex]1.5[/tex] is well affordable.
You view tea and scones as perfect complements, and you prefer to consumer one cup of tea with one scone. Also, your indifference curves are plotted with tea on the vertical axis. If you presently have two cups of tea and one scone, what this the marginal rate of substitution (MRS) at this point
Answer:
Infinity
Explanation:
In the case when the tea and scones are considered to be the perfect complements also you give preference one cup of tea over the one scone
Plus the indifferent curve with tea should be plotted on the vertical axis
So in the case when there is 2 cups of tea with one scone so at this point, the MRS should be at infinity as the indifference curve should be in downward sloping because we presume that there is preferences done at monotonicity
Conducting a search of the story is part of store closing duties why
Searching for the store is part of store closing duties. Why?
A. To look for empty boxes
B. To ensure that all trash has been removed
C. To make sure someone is not hiding
D. To make sure all merchandise is on the sales floor
Answer:
B. To ensure that all trash has been removed
Explanation:
The purpose of conducting a search of the store which is part of store closing duties is to ensure no detail is overlooked such as removing all the trashes available and eventually avoiding more work for the next morning.
In some other cases, it is also an opportunity to clear the corridors or spaces of any merchandise, carts, or litter around the floors.
Company X has 2 million shares of common stock outstanding with a book value of $2 per share. The stock trades for $3 per share. It also has $2 million in face value of debt that trades at 90% of face value. What is the debt ratio that should be used to calculate WACC
Answer:
23.08%
Explanation:
The computation of the debt ratio is shown below:
Debt amount
= 2 million × 0.90
= 1.80 million
And,
Equity amount
= 2 million × 3
= 6 million
Now
debt ratio = debt amount ÷ (amount of debt + amount of equity)
= 1.80 million ÷ ( 6 million + 1.80 million)
= 23.08%
List three (3) distinctions between limited liability partnership and conventional partnership using statute and decided cases.
If you're operating as a limited partnership, the general partner has unlimited liability for company losses and debts, while a limited partner has limited liability protection against company debts and losses. ... In an LLP, all partners have limited liability protection against company obligations and debts.
How have engineer contributed to the society?Explain
Explanation:
Engineers contributed very significantly to a country's development from an agricultural economy to the one that includes manufacturing communication services and exploration to the country's natural resources like 10 hydro power oil and gas
Depreciation by Units-of-activity Method A diesel-powered tractor with a cost of $259,000 and an estimated residual value of $7,400 is expected to have a useful operating life of 85,000 hours. During April, the tractor was operated 200 hours. Determine the depreciation for the month. If required, carry out any division to two decimal places.
Answer:
the depreciation expense is $592
Explanation:
The computation of the depreciation expense is shown below:
= (cost - residual value) ÷ useful operating life × operated in april month
= ($259,000 - $7,400) ÷ 85,000 hours × 200 hours
= $592
Hence, the depreciation expense is $592
The same should be considered and relevant too
Motors are assembled in a process with two resources. The first resource has a capacity of 2 motors per hour. The capacity of the second resource is 4.5 motors per hour. Demand for this process is 2.3 motors per hour.
Instruction: Round your answer to three decimal places.
What is the cycle time of this process (in minutes)? _______minutes
Answer: 26.1 minutes
Explanation:
The cycle time is calculated by the formula:
= Production time available / Desired output
Production time available = 1 hour as production is per hour.
1 hour = 60 minutes
Desired output is the demand per hour from the process
Cycle time = 60 / 2.3
= 26.1 minutes
Can you help me
please
Answer:
united nation childrens funds
Explanation:
i hope it helpful
Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $336,700 $1,092,000 Variable costs 135,100 655,200 Contribution margin $201,600 $436,800 Fixed costs 138,600 268,800 Income from operations $63,000 $168,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place.
Answer:
Beck Inc Operating leverage 3.2
Bryant Inc Operating leverage 2.6
Explanation:
Computation for the operating leverage for Beck Inc. and Bryant Inc
Using this formula
Operating leverage = Contribution margin/Income from operation
Let plug in the formula
Beck Inc Operating leverage = $201,600/ $63,000
Beck Inc Operating leverage= 3.2
Bryant Inc Operating leverage= $436,800/$168,000
Bryant Inc Operating leverage= 2.6
Therefore the operating leverage for Beck Inc. and Bryant Inc are:
Beck Inc Operating leverage 3.2
Bryant Inc Operating leverage 2.6
Choose the correct statements about the ROC curve.
A. By plotting the true-positive rate against the false-positive rate for different threshold values, the ROC curve can be used to select the optimal model.
B. ROC stands for Receiver Operating Characteristic curve, which was originally developed to detect enemy aircrafts on radar.
C. The ROC curve is a useful diagnostic tool for determining the optimal classification model.
D. The ROC curve was originally developed to optimize healthcare and detect congestive heart failure readmission rate.
Answer:
B
Explanation:
The ROC stands for Reviever Operating Characteristics curve ehic was originally developed to detect enemy aircrafts on reader
The correct statement about the ROC curve is that ROC stands for the Receiver Operating Characteristic curve, which was originally developed to detect enemy aircraft on radar. Thus, option B is correct.
What is a curve?A curve can be defined as the relation that can be between the teo element. this is represented by the graph that is formed on the basis of the change in the elements that are surrounding it. If there is a change in one thing then there can also be a change in another and it may have an effect.
The best accuracy and false alarm rate for a classification algorithm at the approaches suggested are calculated and plotted to create the ROC curve.
The Receiver Operating Characteristic curve, abbreviated ROC curve, was created to find hostile aircraft using radar. Therefore, option B is the correct option.
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El 5 de diciembre se solicitó un préstamo por USD.275,000, negociado al 6.5%
de interés anual a un plazo de 5 años. Los pagos de capital e intereses se harán
mensualmente.
Bill Johnson, sales manager, and Diane Buswell, controller, at Current Designs are beginning to analyze the cost considerations for one of the composite models of the kayak division. They have provided the following production and operational costs necessary to produce one composite kayak.
Kevlar $250 per kayak
Resin and supplies $100 per kayak
Finishing kit (seat, rudder, ropes, etc.) $170 per kayak
Labor $420 per kayak
Selling and administrative expenses—variable $400 per kayak
Selling and administrative expenses—fixed $119,700 per year
Manufacturing overhead—fixed $240,000 per year
Bill and Diane have asked you to provide a cost-volume-profit analysis, to help them finalize the budget projections for the upcoming year. Bill has informed you that the selling price of the composite kayak will be $2,000.
(a) Calculate variable costs per unit.
Variable cost per unit $
Bill Johnson, sales manager, and Diane Buswell, co
(b) Determine the contribution margin per unit.
Contribution margin per unit $
Bill Johnson, sales manager, and Diane Buswell, co
(c) Using the contribution margin per unit, determine the break-even point in units for this product line.
Break-even point
Bill Johnson, sales manager, and Diane Buswell, co
units
(d) Assume that Current Designs plans to earn $270,600 on this product line. Using the contribution margin per unit, calculate the number of units that need to be sold to achieve this goal.
Number of units
Bill Johnson, sales manager, and Diane Buswell, co
units
(e) Based on the most recent sales forecast, Current Designs plans to sell 1,000 units of this model. Using your results from part (c), calculate the margin of safety and the margin of safety ratio. (Round margin of safety ratio to 1 decimal place, e.g. 25.5%.)
Margin of safety $
Bill Johnson, sales manager, and Diane Buswell, co
Margin of safety ratio
Bill Johnson, sales manager, and Diane Buswell, co
%
By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor.
(a) Calculate variable costs per unit.
Variable cost per unit $
Bill Johnson, sales manager, and Diane Buswell, co
(b) Determine the contribution margin per unit.
Contribution margin per unit $
Bill Johnson, sales manager, and Diane Buswell, co
(c) Using the contribution margin per unit, determine the break-even point in units for this product line.
Break-even point
Bill Johnson, sales manager, and Diane Buswell, co
units
(d) Assume that Current Designs plans to earn $270,600 on this product line. Using the contribution margin per unit, calculate the number of units that need to be sold to achieve this goal.
Number of units
Bill Johnson, sales manager, and Diane Buswell, co
units
(e) Based on the most recent sales forecast, Current Designs plans to sell 1,000 units of this model. Using your results from part (c), calculate the margin of safety and the margin of safety ratio. (Round margin of safety ratio to 1 decimal place, e.g. 25.5%.)
Margin of safety $
Bill Johnson, sales manager, and Diane Buswell, co
Margin of safety ratio
Bill Johnson, sales manager, and Diane Buswell, co
%
Answer:
a. Particulars Amount$
Kevlar per kayak 250
Resin and Supplies per kayak 100
Finishing Kit per kayak 170
Labor per Kayak 420
Variable selling & admin. exp. per kayak 400
Total variable cost per kayak 1,340
b. Contribution margin per unit = Selling price per unit – Variable cost per unit
Contribution margin per unit = $2,000 per unit - $1,340 per unit
Contribution margin per unit = $660 per unit
c. Break-even point in units = Total fixed costs/ Contribution margin per unit
Break-even point in units = ($ 119,700 + $240,000) / $660 per unit
Break-even point in units = 545 units
d. Number of units to be sold = (Total Fixed cost + Target Profit)/ Contribution margin per unit
Number of units to be sold= ($119,700 + $240,000 + $270,600) / $660 per unit
Number of units to be sold = 955 units
So therefore, the company needs to sell 955 units in order to achieve target profit of $270,600.
Makers Corp. had additions to retained earnings for the year just ended of $553,000. The firm paid out $191,000 in cash dividends, and it has ending total equity of $4.96 million. The company currently has 240,000 shares of common stock outstanding. a. What are earnings per share
Answer:
$1.51
Explanation:
Calculation to determine the earnings per share
Using this formula
Earnings per share = (Retained Earnings + Dividend paid out) / Common stock outstanding
Let plug in the formula
Earnings per share= ($553,000+$191,000)/240,000
Earnings per share=$362,000/240,000
Earnings per share= $1.51
Therefore Earnings per share is $1.51
Comparing Three Depreciation Methods Dexter Industries purchased packaging equipment on January 8 for $249,400. The equipment was expected to have a useful life of four years, or 8,800 operating hours, and a residual value of $20,600. The equipment was used for 3,080 hours during Year 1, 1,848 hours in Year 2, 2,464 hours in Year 3, and 1,408 hours in Year 4. Required: 1. Determine the amount of depreciation expense for the four years ending December 31 by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the four years by each method. Round the answer for each year to the nearest whole dollar. Depreciation Expense Year Straight-Line Method Units-of-Activity Method Double-Declining- Balance Method Year 1 $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Year 2 $fill in the blank 4 $fill in the blank 5 $fill in the blank 6 Year 3 $fill in the blank 7 $fill in the blank 8 $fill in the blank 9 Year 4 $fill in the blank 10 $fill in the blank 11 $fill in the blank 12 Total $fill in the blank 13 $fill in the blank 14 $fill in the blank 15 2. What method yields the highest depreciation expense for Year 1
Answer:
Straight line :
Depreciation expense each of the four years is $57,200
total depreciation = $228,800
Double declining :
Year 1 = $124,700
Year 2 = $62350
Year 3 = $31,175
Year 4 = $15,588
Total depreciation expense = $233,813
Activity based depreciation
year 1 = $80,080
year 2 = $48,048
year 3 = $64,064
year 4 = $36,608
Total depreciation expense = $288,800
the deprecation method that yields the highest depreciation expense in year 1 is the double declining method
Explanation:
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
($249,400 - $20,600) / 4 = $57,200
Depreciation expense each of the four years is $57,200
total depreciation = $57,200 x 4 = $228,800
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1/useful life) = 2/4
Year 1 = 2/4 x $249,400 = 124,700
book value = $249,400 - 124,700 = 124,700
Year 2 = 2/4 x 124,700 = 62350
Book value = 124,700 - 62350 = 62350
Year 3 = 2/4 x 62350 = 31,175
book value = 62350 - 31,175 = 31,175
Year 4 = 2/4 x 31,175 = 15,587.50
Addition of the depreciation expenses = $233,812.50
Activity method based on hours worked = (hours worked that year / total hours of the machine) x (Cost of asset - Salvage value)
($249,400 - $20,600) / 8,800 = 26
year 1 = 26 x 3,080 = $80,080
year 2 = 26 x 1,848 = $48,048
year 3 = 26 x 2,464 = $64,064
year 4 = 26 x 1,408 = $36,608
Addition of the depreciation expenses = $288,800
Completing a Master Budget
Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter:
a. As of December 31 (the end of the prior quarter), the company’s general ledger showed the following account balances:
Debits
Credits
Cash
$ 48,000
Accounts receivable
224,000
Inventory
60,000,
Buildings and equipment (net)
370,000
Accounts payable
$ 93,000
Capital stock
500,000
Retained earnings
_______
109,000
$702,000
$702,000
b. Actual sales for December and budgeted sales for the next four months are as follows:
December (actual)
$280,000
January
$400,000
February
$600,000
March
$300,000
April
$200,000
c. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales.
d. The company’s gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.)
e. Monthly expenses are budgeted as follows: salaries and wages, $27,000 per month: advertising, $70,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $42,000 for the quarter.
f. Each month’s ending inventory should equal 25% of the following month’s cost of goods sold.
g. One-half of a month’s inventory purchases is paid for in the month of purchase; the other half is paid in the following month.
h. During February, the company will purchase a new copy machine for $1,700 cash. During March, other equipment will be purchased for cash at a cost of $84,500.
i. During January, the company will declare and pay $45,000 in cash dividends.
j. Management wants to maintain a minimum cash balance of $30,000. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.
Required:
Using the data above, complete the following statements and schedules for the first quarter:
1. Schedule of expected cash collections:
January
February
March
Quarter
Cash sales
$ 80,000
Credit sales
224,000
Total cash collections
$304,000
2. a. Merchandise purchases budget:
January
February
March
Quarter
Budgeted cost of goods sold
$240,000*
$360,000
Add desired ending inventory
90,000f
Total needs
330,000
Less beginning inventory
60,000
Required purchases
$270,000
___________
*$400,000 sales X 60% cost ratio =$240,000.
†$360,000 X 25% = $90,000.
b. Schedule of expected cash disbursements for merchandise purchases:
January
February
March
Quarter
December purchases
$ 93,000
$ 93,000
January purchases
135,000
135,000
270,000
February purchases
—
March purchases
—
Total cash disbursements for purchases
$228,000
3. Schedule of expected cash disbursements for selling and administrative expenses:
January
February
March Quarter
Salaries and wages
$ 27,000
Advertising
70,000
Shipping
20,000
Other expenses
12,000
Total cash disbursements for
selling and administrative expenses
$129,000
4. Cash budget:
January
February
March Quarter
Cash balance, beginning
$ 48,000
Add cash collections
304,000
Total cash available
352,000
Less cash disbursements:
Purchases of i nventory
228,000
Selling and administrative
expenses
129,000
Purchases of equipment
_____
Cash dividends
45,000
Total cash disbursements
402,000
Excess (deficiency) of cash
Financing: Etc.
(50,000)
5. Prepare an absorption costing income statement for the quarter ending March 31 as shown in Schedule 9 in the chapter.
6. Prepare a balance sheet as of March 31.
Answer:
heuer7eguejeu7 said she had a good to
Petrox Oil Co. is considering a project that will have fixed costs of $12,000,000. The product will be sold for $37.50 per unit and will incur a variable cost of $12.80 per unit.
Given Petrox's cost structure, it will have to sell __________ units to break even on this project (Q_BE).
Petrox Oil Co.'s marketing sales director doesn't think that the market for the firm's goods is big enough to sell enough units to make the company's target operating profit of $15,000,000. In fact, she believes that the firm will be able to sell only about 150,000 units. However, she also thinks the demand for Petrox Oil Co.'s product is relatively inelastic, so the firm can increase the sale price. Assuming that the firm can sell 150,000 units, what price must it set to meet the CFO's EBIT goal of $15,000,000?
a. $192.80
b. $221.72
c. $241.00
d. $202.44
Answer:
Fixed costs = $12,000,000
Selling price = $37.50
Variable cost = $12.80
hope this helps
At the given cost structure, Petrox have to sell 485,830 units to break-even on this project .The selling price to to be set to meet the profit of $15,000,000 is $192.80. Thus, the correct answer is option A.
What is break-even ?The break-even point occurs when total cost and total revenue are equal. Though opportunity costs have been paid and capital has received the risk-adjusted, expected return, there is no net loss or gain. In short, all necessary costs are met, and there is no profit or loss.
The break even units is calculated as,
Break-even units = Fixed Cost / Contribution Margin
= Fixed Cost / Sale Price - Variable Cost
= $12,000,000/ $37.50-$12.80
= 485,830 units
The price that needed to be set is calculated as,
Target units=Fixed Costs+ Target EBIT/selling price-variable cost
Assume selling price is X
150,000= ($12,000,000+$15,000,000) / X-12.80
150,000=27,000,000 / X-12.80
150,000× (X-12.80)=27,000,000
X - 12.80=27,000,000 / 150,000
X-12.80 = 180
X = 180+12.80
X= $192.80
Therefore, the break-even units is 485,830 and the the price to be set is $192.80 to meet the CFO's EBIT goal of $15,000,000.
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