Answer:
the expected total cash collections for May is $160,600
Explanation:
The computation of the expected total cash collections for May is given below
= 10% of $152,000 + 50% of $182,000 + 40% of $136,000
= $15,200 + $91,000 + $54,400
= $160,600
Hence, the expected total cash collections for May is $160,600
The same should be considered
A company purchased factory equipment for $350,000. It is estimated that the equipment will have a $35,000 salvage value at the end of its estimated 5-year useful life. If the company uses the double-declining-balance method of depreciation, the amount of annual depreciation recorded for the second year after purchase would be:_________ a. $140,000 b. $84,000. c. $126,000 d. $75,600
Answer:
Annual depreciation= $126,000
Explanation:
Giving the following information:
Purchase price= $350,000
Useful life= 5 years
Salvage value= $35,000
To calculate the annual depreciation under the double-declining balance, we need to use the following formula:
Annual depreciation= 2*[(book value)/estimated life (years)]
Annual depreciation= 2*[(350,000 - 35,000) / 5]
Annual depreciation= $126,000
If budgeted beginning inventory is $8,300, budgeted ending inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted purchases should be: Group of answer choices $9,160 $11,360 $1,960 $860 $1,100
Answer: $11,360
Explanation:
Budgeted cost of goods sold = Budgeted beginning inventory + Budgeted purchases - Budgeted ending inventory
10,260 = 8,300 + Budgeted purchases - 9,400
Budgeted purchases = 10,260 - 8,300 + 9,400
= $11,360
Consider the following data and then calculate the half-life for this particular isotope:
Time Activity (cpm)
0 days 320,000
40 days 216,100
100 days 120,000
(A) 35.2 days.
(B) 75.6 days.
(C) 70.6 days.
(D) 62.9 days.
(E) None of these.
Answer:
D. 62.9 days
Explanation:
Half Life Cpm activity:
320,000 / 2 = 160,000
At 100 days cpm is 120,000 then cpm 160,000 will be at 62.9 days.
[320,000 - 216,100] / 40 days = 2,597.5
160,000 / 2,597.5 = 62.9 days.
Suppose there is a simple one good economy that only produces spinning rims. In 2015, the economy was able to produce 1 million sets of spinning rims at an amazing price of $500 per set. In 2016, the economy was able to produce 1 million sets of spinning rims at a price of $1,000 per set. By what amount did real GDP increase between 2015 and 2016 in the simple one good economy
Answer: 0
Explanation:
Firstly, we will calculate the nominal value in 2015 which will be:
= $500 x 1 million
= $500 million
The nominal value in 2016 will be:
= $1000 x 1 million
= $1 billion
Real GDP will be the price of the base year multiplied by the quantity of the current year which will be:
= $500 million x 1 million sets
= $500 million
Therefore, the increase in real GDP is zero.
The following information is available for Jorgensen Company: a. The Cash Budget for March shows a bank loan of $10,000 and an ending cash balance of $48,000. b. The Sales Budget for March indicates sales of $120,000. Accounts receivable is expected to be 70% of March sales.
Answer:
Accounts receivable is
Explanation:
Expected accounts receivable is 70% of sales amount. The sales budget is $120,000 then accounts receivable will be $84,000. The rest of sales will be in cash, so the cash collection for the month of march will be $36,000. The new cash balance will be $36,000 + $48,000 = 84,000.
_______________ skills, though developed through job training and work experience, are generally acquired during the course of your formal education.
a. Interpersonal
b. Technical
c. Conceptual
d. Communication
Answer:
D
Explanation:
$ 485,000 $ 432,000 $Enter a dollar amount Enter percentages rounded to 0 decimal places % Inventory $ 786,000 $ 617,000 $Enter a dollar amount Enter percentages rounded to 0 decimal places % Total assets $3,111,000 $2,707,000 $Enter a dollar amount Enter percentages rounded to 0 decimal places %
Answer:
Accounts receivable
Dec 31, 2017 = $485,000
Dec 31, 2016 = $432,000
Amount = $53,000
Percentage = $53,000/$432,000
Percentage = 0.1226852
Percentage = 12%
Inventory
Dec 31, 2017 = $786,000
Dec 31, 2016 = $617,000
Amount = $169,000
Percentage = $169,000 / $617,000
Percentage = 0.2739060
Percentage = 27%
Total assets
Dec 31, 2017 = $3,111,000
Dec 31, 2016 = $2,707,000
Amount = $404,000
Percentage = $404,000/$2,707,000
Percentage = 0.1492427
Percentage = 15%
Based on a predicted level of production and sales of 12,000 units, a company anticipates reporting operating income of $26,000 after deducting variable costs of $72,000 and fixed costs of $10,000. Based on this information, the budgeted amounts of fixed and variable costs for 15,000 units would be
Answer:
Fixed Cost = $10,000
Variable Costs = $90,000
Explanation:
Variable Cost per unit = $72,000 ÷ 12,000
= $6
Variable Costs at 15,000 units = $6 x 15,000
= $90,000
Fixed Cost (given) = $10,000
Accounts receivable $ 18,000 Long-term notes payable $ 21,000 Accounts payable 11,000 Office supplies 2,800 Buildings 45,000 Prepaid insurance 3,560 Cash 7,000 Unearned services revenue 3,000 Compute Chavez Company's current ratio using the above information.
Answer: 2.24
Explanation:
Current ratio = Current Assets / Current liabilities
Current assets = Accounts receivable + Office supplies + Prepaid insurance + Cash
= 18,000 + 2,800 + 3,560 + 7,000
= $31,360
Current liabilities:
= Accounts payable + Unearned service revenue
= 11,000 + 3,000
= $14,000
Current ratio = 31,360 / 14,000
= 2.24
one markeitng action that can be taken to sell a single product or service to muylpele market segments is to
Answer: C. develop separate promotional campaigns.
Explanation:
Different market segments will have different norms and values that companies will have to take advantage of in order to sell their goods or services.
They will therefore need to develop separate promotional campaigns that are aimed at taking advantage of these norms and values in order to appeal to the people in the different segments.
Murphy's, Inc., has 45,000 shares of stock outstanding with a par value of $1 per share. The market value is $10 per share. The balance sheet shows $70,500 in the capital in excess of par account, $45,000 in the common stock account, and $133,500 in the retained earnings account. The firm just announced a stock dividend of 12 percent. What will the balance in the capital in excess of par account be after the dividend?
Answer: $119100
Explanation:
The balance in the capital in excess of par account be after the dividend will be calculated thus:
Firstly, we'll calculate the change in capital in excess of par and this will be:
= Number of shares × dividend rate × (market value - par value)
= 45,000 × 12% × ($10 - $1)
= (45000 × 0.12) × $9
= 5400 × $9
= $48,600
Then, the balance in the capital in excess of par after the dividend will be:
= $70,500 + $48,600
= $119,100
Bella Bags is a British company that sells luxury leather purses manufactured in London. Currently, its products are carried at high-end department stores all across Europe. The company prides itself on its exceptional customer service. However, the company has been criticized in the past for carrying only two designs of bags. There is currently growing market demand for high-end luxury accessories. Bella Bags faces fierce competition from established luxury brands. Which of the following best characterizes an actionable strategy for Bella Bags that works on reducing the company's weaknesses to avoid threats?
A) Reduce the threat of high competition by expanding the product line and offering more variety
B) Promote the company's exceptional customer service to leverage the increasing demand for luxury goods
C) Reduce the threat of high competition by promoting the company's narrow product offering
D) Reduce the threat of high competition by leveraging the increasing demand for luxury goods
Answer:
A
Explanation:
Explain the difference between the concepts of Business Management and Technology Management. Provide examples.
Answer:
Explanation:
There is a difference between business management and technology management.
Business management refers to managing the organization's business perspective so that the direct business objectives of the organization is served.
Business management involves managing the domain, employees, looking after the business processes of an organization, etc. whereas
While technology management is used to make the business process simple and convenient through various aspects like managing the technical aspect of each and every business process and that is possible by having details about the technical aspects that are involved in all the business process of the organization.
For an organization to be successful it should possess all the required management techniques that include the business and technical aspects both.
Today the way of doing business has changed a lot and hence the organizations need to be quite diligent and effective in order to sustain and remain competitive in the industry.
You are calculating the volume quantity needed for material that will compact to 95% of its original undisturbed volume. You know that you will need to fill a void with a volume of 1,487 cubic yards. What is the volume of material needed from the borrow pit to equal this amount when fully compacted
Answer:
Volume = 1565.56 cubic yards
Explanation:
The computation of the volume of material required is shown below:
95% × volume = 1,487 cubic yards
Volume = 1565.56 cubic yards
Basically 95% of volume is equivalent to the 1487 cubic yards
So according to this we determined the volume
Hence, the same should be considered
How do you think the four management functions of planning, organizing, leading , and controlling fit in with the ideas Sinek expresses in his talk?
Answer:
This posting should be a minimum of one short paragraph and a maximum of two paragraphs. Word totals for this post should be in the 100–200-word range. Whether you agree or disagree, explain why with supporting evidence and concepts from the readings or a related experience. Include a reference, link, or citation when appropriate.
The four functions of management are planning, organizing, leading, and controlling. By applying the right resources and knowledge, all these functions can easily fit in the ideas.
What is Management?More than just specialized knowledge, management requires an ability to navigate numerous procedural, structural, and interpersonal challenges in the process of guiding one's team to the completion of various goals.
What are the four management functions?No matter which company you work in, these four management functions remain consistent and applicable across all sectors.
Planning is important to identify the goals and making plans to attain these goals.Organizing refers to taking up of these plans and putting into action.Leading is the stage of motivating and influencing employees to do the work. Controlling function consists of monitoring performance and progress through project execution and making adjustments as needed.Thus, by using knowledge, team-management, and right resources, all these functions can fit in with the ideas.
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When a market is in equilibrium, the: multiple choice 1 quantity demanded equals the price. quantity demanded equals the quantity supplied at the market price. quantity demanded equals the quantity supplied and they both equal the price. quantity supplied equals the price. The market for cell phones reaches equilibrium because cell phone sellers have an incentive: multiple choice 2 to decrease quantity and so do cell phone consumers, so the price goes to to equilibrium. for prices to rise and some cell phone consumers will not buy at higher prices, driving the price to equilibrium. to increase quantity and so do cell phone consumers, so the price goes to to equilibrium. for prices to fall and some cell phone consumers only buy at higher prices, driving the price to equilibrium.
ANSWER:
2 Batteries
Explanation:
An analyst prepares the following common-size income statements for Perez Company: 20X1 20X2 20X3 Sales 100% 100% 100% Cost of goods sold 50% 52% 53% Selling and administrative expense 16% 12% 9% Interest income 4% 4% 4% Pretax income 30% 32% 34% Income tax expense 15% 16% 17% Net income 15% 16% 17% Based only on this information, Perez's improving net profit margin is most likely a result of:
Answer:
Perez Company
Based only on this information, Perez's improving net profit margin is most likely a result of:
Decreasing Selling and Administrative Expenses over the years.
Explanation:
a) Data and Calculations:
Perez Company
Common-size Income Statements for three years:
20X1 20X2 20X3
Sales 100% 100% 100%
Cost of goods sold 50% 52% 53%
Selling and administrative expense 16% 12% 9%
Interest income 4% 4% 4%
Pretax income 30% 32% 34%
Income tax expense 15% 16% 17%
Net income 15% 16% 17%
b) A review of the common-size income statement of Perez Company shows that its selling and administrative expenses continued to reduce an average of 300 percentage points year on year. This reduction can be clearly seen in its improved net income, which also continued to improve year on year. However, the improvement was hampered by increasing income tax expense, which witnessed the same increase.
As a researcher, what would you do if you set to reject the null and found the null to be true?
In the event that the null hypothesis was true, I would report my results honestly and transparently. If my results did not support my expectations, my goal as a researcher would be to learn as much as possible from them.
The first thing I would do is to make my data and my statistical analysis error-free. If my results were influenced by outliers or other unusual patterns in the data, I would check for them. I would recheck the statistical methods I used to ensure that they were appropriate and correct for the type of data I collected.
Once I was confident that my data and analysis were correct, I would consider whether there were any other explanations for the null hypothesis.
Therefore, In the event that the null hypothesis was true, I would report my results honestly and transparently.
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Tyler Tooling Company uses a job order cost system with overhead applied to products on the basis of machine hours. For the upcoming year, the company estimated its total manufacturing overhead cost at $420,000 and total machine hours at 60,000. During the first month of operations, the company worked on three jobs and recorded the following actual direct materials cost, direct labor cost, and machine hours for each job: Job 101 Job 102 Job 103 TotalDirect materials used 19,200 14,400 9,600 43,200 Direct labor 28,800 11,200 9,600 49,600 Machine hours 1,000 hours 4,000 hours 2,000 hours 7,000 hoursJob 101 was completed and sold for $60,000.Job 102 was completed but not sold.Job 103 is still in process.Actual overhead costs recorded during the first month of operations totaled $45,000.Required: 1. Calculate the predetermined overhead rate. (Round your answer to 2 decimal places.)2. Compute the total manufacturing overhead applied to the Work in Process Inventory account during the first month of operations. (Round your intermediate calculations to 2 decimal places.)3. Compute the balance in the Work in Process Inventory account at the end of the first month. (Round your intermediate calculations to 2 decimal places.)4. How much gross profit would the company report during the first month of operations before making an adjustment for over- or underapplied manufacturing overhead? (Round your intermediate calculations to 2 decimal places.)5-a. Determine the balance in the Manufacturing Overhead account at the end of the first month. (Round your intermediate calculations to 2 decimal places.)
Answer:
Tyler Tooling Company
1. The predetermined overhead rate is:
= $7
2. The total manufacturing overhead applied to the Work in Process Inventory account during the first month of operations is:
= $49,000
3. The balance in the Work in Process Inventory account at the end of the first month is:
= $86,800
4. The gross profit that the company would report during the first month of operations before making an adjustment for over- or underapplied manufacturing overhead is:
= $5,000
5a. The balance in the Manufacturing Overhead account at the end of the first month is:
= $4,000 overapplied
Explanation:
a) Data and Calculations:
Estimated total manufacturing overhead for the coming year = $420,000
Estimated total machine hours for the coming year = 60,000 mh
Actual jobs data: Job 101 Job 102 Job 103 Total
Direct materials cost $19,200 $14,400 $9,600 $43,200
Direct labor cost 28,800 11,200 9,600 49,600
Machine hours cost 1,000 4,000 2,000 7,000
Sale of Job 101 = $60,000
Actual overhead for the first month = $45,000
1. Predetermined overhead rate = Estimated overhead/estimated machine hours
= $420,000/60,000
= $7
2. The total manufacturing overhead applied to the Work in Process Inventory account during the first month of operations is:
= total machine hours used * $7
= $49,000 (7,000 * $7)
3. The balance in the Work in Process Inventory account at the end of the first month is:
Work in Process
Account Titles Debit Credit
Direct materials $43,200
Direct labor 49,600
Overhead applied 49,000
Cost of Job 1 sold $55,000 ($19,200+$28,800+$7,000)
Ending balance $86,800 (= costs of Job 102 and 103)
4. The gross profit that the company would report during the first month of operations before making an adjustment for over- or underapplied manufacturing overhead is:
= Gross profit for Job 101 = $5,000 ($60,000 - $55,000)
5a. The balance in the Manufacturing Overhead account at the end of the first month is:
= Actual overhead incurred - overhead applied
= $45,000 - $49,000
= $4,000 overapplied
On December 31, 2020, Lipton, Inc. sold $3,000,000 (face value) of bonds. The bonds are dated December 31, 2020, pay interest annually on December 31, and will mature on December 31, 2020 The following schedule was prepared by the accountant for 2020 Annual Interest Period Interest to Interest be paid Expense Amortization Unamortized Amount $75,000 51.750 Bond Carrying Value $2,925,000 2,948,250 1 $240,000 $263,250 $23,250 On the basis of the above information, answer the following questions What is the stated interest rate for this bond issue? Stated interest rate SHOW LIST OF ACCOUNTS What is the market interest rate for this bond issun? Market interest rate 5 What is the market interest rate for this bond issue? Market interest rate % SHOW LIST OF ACCOUNTS What was the selling price of the bonds as a percentage of the face value? (Round answer to 1 decimal place, e.g. 52.7.) Selling price SHOW LIST OF ACCOUNTS tudy Prepare the journal entry to record the sale of the bond issue on December 31, 2020. (Credit account titles are autofnatically indented wh manually.) Debit Date Account Titles and Explanation Dec 31, 2020 Credit SHOW LIST OF ACCOUNTS Prepare the journal entry to record the payment of interest and amortization of discount on December 31, 2021. (Credit account titles an entered. Do not indent manually.) Account Titles and Explanation Debit Dec 31, 2021 Date Credit ly SHOW LIST OF ACCOUNTS
Answer:
Lipton, Inc.
1. Stated interest = Annual interest/Face value of bonds * 100
= $240,000/$3,000,000 * 100
= 8%
2. The market interest rate for this bond issue = Interest Expense/Price of issued bonds * 100
= $263,250/$2,925,000 * 100
= 9%
3. The selling price of the bonds as a percentage of the face value
= $2,925,000/$3,000,000 * 100
= 97,5%
4. Journal Entries:
Date Account Titles and Explanation Debit Credit
Dec 31, 2020 Cash $2,925,000
Bonds Discounts 75,000
Bonds Payable $3,000,000
To record the issuance of the bonds at a discount.
5. Journal Entries:
Date Account Titles and Explanation Debit Credit
Dec 31, 2021 Interest Expense $263,250
Amortization of bond discounts $23,250
Cash $240,000
To record the payment of interest and amortization of discount.
Explanation:
a) Data and Calculations:
December 31, 2020
Face value of issued bonds = $3,000,000
Interest payment = December 31 annually
Unamortized Amount = $75,000
Price of issued bonds = $2,925,000 ($3,000,000 - $75,000)
Discount on bonds = $75,000 ($3,000,000 - $2,925,000)
Schedule:
2020 Annual Interest Interest Expense Amortization Bond Carrying Value
$2,925,000
1 $240,000 $263,250 $23,250 2,948,250
1. Stated interest = Annual interest/Face value of bonds * 100
= $240,000/$3,000,000 * 100
= 8%
2. The market interest rate for this bond issue = Interest Expense/Price of issued bonds * 100
= $263,250/$2,925,000 * 100
= 9%
3. The selling price of the bonds as a percentage of the face value
= $2,925,000/$3,000,000 * 100
= 97,5%
Analysis:
December 31, 2020:
Cash $2,925,000 Bonds Discounts $75,000 Bonds Payable $3,000,000
December 31, 2021:
Interest Expense $263,250 Amortization of bond discounts $23,250 Cash $240,000
At the beginning of May, Golden Gopher Company reports a balance in Supplies of $390. On May 15, Golden Gopher purchases an additional $2,200 of supplies for cash. By the end of May, only $190 of supplies remains. Required: 1.
Answer:
Missing word "rief Exercise 3-6 Parts 1 and 2 1. & 2. Record the necessary entries in the Journal Entry Worksheet below. (If no entry is required for a particular transaction/event, select "No journal entry required n the first account field.) view transaction list view general journal Journal Entry Worksheet Record the purchase of supplies. General Journal Debit Credit Date 2,600 May 15 Supplies expense Enter debits before credits clear entry record entry 7. 062 points Brief Exercise 3-6 Part 3 3. Calculate the balances after adjustment on May 31 of Supplies and Supplies Expense. Ending Balance Supplies Supplies expense"
1&2 Date General Journal Debit Credit
May 15 Supplies $2,200
Cash $2,200
May 31 Supplies expense $2,400
($390 + $2,200 - $190)
Supplies $2,400
3). Particulars Ending Balance
Supplies $190
Supplies expense $2,400
lannigan Company manufactures and sells a single product that sells for $450 per unit; variable costs are $270. Annual fixed costs are $800,000. Current sales volume is $4,200,000. Compute the current margin of safety in dollars for Flannigan Company
Answer:
$2,200,000
Explanation:
Margin of safety means by how much sales can fall before a firm starts making a loss.
Margin of safety = Current Sales - Break even sales
where,
Break even sales = Fixed Cost ÷ Contribution margin ratio
= $800,000 ÷ 0.40
= $2,000,000
therefore,
Margin of safety = $4,200,000 - $2,000,000
= $2,200,000
Asteria earned a $27,000 salary as an employee in 2020. How much should her employer have withheld from her paycheck for FICA taxes
Answer:
$2,070
Explanation:
Calculation to determine How much should her employer have withheld from her paycheck for FICA taxes
Social security tax 6.2%
Medicare tax which is 1.45%
Social security tax = $27,000 x 6.2%
Social security tax = $1,674
Medicare tax = $27,000 x 1.45%
Medicare tax =$391.5
FICA taxes Paycheck withheld= - $1,674 + $391.5
FICA taxes Paycheck withheld=$2,065.5
FICA taxes Paycheck withheld=$2,070 (Approximately)
Therefore How much should her employer have withheld from her paycheck for FICA taxes will be $2,070
Gotham City acquires $25,000 of inventory on November 1, 20X7, having held no inventory previously. On December 31, 20X7, the end of Gotham City's fiscal year, a physical count shows $8,000 still in stock. During 20X8, $6,500 of this inventory is used, resulting in a $1,500 remaining balance of supplies on December 31, 20X8.
Based on the preceding information, what would be the correct account balances for 20X7 if Gotham City used the purchase method of accounting for inventories?
Answer:
$25,000; $8,000
Explanation:
Based on the information given , we were told that they acquires the amount of $25,000 of inventory on NOVEMBER 1, 20X7, in which on DECEMBER 31, 20X7, a PHYSICAL COUNT shows $8,000 was still in stock which means wthat the CORRECT ACCOUNT BALANCES for 20X7 if Gotham City used the PURCHASE METHOD of accounting for INVENTORIES will be Expenditure of the amount of $25,000 and Inventory of supplies of the amount of $8000.
What percentage of authorized shares was issued by Coca-Cola at December 31, 2015, and by PepsiCo at December 26, 2015
Answer:
December 26
Explanation:
Because Pepsi Co is buy
A company uses the periodic inventory method and the beginning inventory is overstated by $9,000 because the ending inventory in the previous period was overstated by $9,000. The amounts reflected in the current end of the period balance sheet are
Answer:
"Correct Correct" is the right answer.
Explanation:
Overall inventory will be calculated by means including its physical computing mechanism at either the conclusion of each accountability conscious cognitive mostly on periodical inventory or purchasing department.Excessive conclusion or termination creates excessive starting inventory thresholds or their levels.Which of the following methods of accounting for investments is appropriate when the investor has significant influence over the investee?
a. cost method.
b. mark to market method.
c. equity method.
d. lower of cost or market method.
Answer:
The answer is "Option c".
Explanation:
The equity method is indeed the conventional technique used whenever an investor, a firm, has a massive effect on some other asset manager.
It is the method used by a company to document its money generated through investment in another company.
The investor should record its profits or losses following its ownership percentage. It regularly changes the value of the property to a balance sheet of even an investor.
A long-term investment classified as equity securities with controlling influence implies that the investor can exert a controlling influence over the investee. An investor who owns more than ____% of a company's voting stock has control over the investee.
Answer: 50%
Explanation:
The Equity Securities with controlling influence refers to the long-term investment whereby the investor exert controlling influence over the investee. In such case, the investors own 50% or more of the voting stock.
On the other hand, the Equity securities with significant influence refers to the long-term investment whereby the investor exerts significant influence over the investee. In such case, the investors own 20% or more of the voting stocks but should be less than 50%.
Jayco has the following expected cash flows from a project. Calculate the payback period of the project. Year 0 (685,000) Year 1 255,000 Year 2 355,000 Year 3 455,000 Year 4 555,000
Answer:
2.16 years
Explanation:
Minden Company introduced a new product last year for which it is trying to find an optimal selling price. Marketing studies suggest that the company can increase sales by 5,000 units for each $2 reduction in the selling price. The company’s present selling price is $93 per unit, and variable expenses are $63 per unit. Fixed expenses are $830,700 per year. The present annual sales volume (at the $93 selling price) is 25,500 units.
Required:
1. What is the present yearly net operating income or loss?
2. What is the present break-even point in unit sales and in dollar sales?
3. Assuming that the marketing studies are correct, what is the maximum annual profit that the company can earn? At how many units and at what selling price per unit would the company generate this profit?
Answer:
1. The present yearly net operating loss is $65,700
2. Break even point in unit sales is 27,690 units, in dollars sales $2,575,170.00
3. The maximum annual profit that the company can earn is $23,300, at 30,500 units with a selling price per unit of $91
Explanation:
At breakeven point, the cost and revenue of the company are same such that the company neither a profit nor a loss. Operating profit or loss is the difference between the revenue and the cost of the company.
The cost of the company usually consist of the fixed and variable elements.
Given that the company’s present selling price is $93 per unit, and variable expenses are $63 per unit. Fixed expenses are $830,700 per year with present annual sales volume (at the $93 selling price) is 25,500 units
Hence the operating profit or (loss)
= $93 * 25,500 - ($63 * 25,500 + $830,700)
= $765,000 - $830,700
= ($65,700)
A loss of $65,700
Break even point in unit sales = Fixed costs / (Selling price per unit – Variable cost per unit)
= $830,700 / ($93 - $63)
= $830,700 / $30
= 27,690 units
In dollar sales
= $93 * 27,690
= $2,575,170.00
if the marketing studies are correct then the new selling price per unit will be
= $93 - $2
= $91
The units sold will be
= 5000 + 25,500
= 30,500 units
The maximum profit to be made
= $91 * 30,500 - ($63 * 30,500 + $830,700)
= $854,000 - $830,700
= $23,300
