A clothing manufacturer is considering whether to add hoodies to its range of products. The hoodies would sell for $45 each and the company expects to sell 10,000 units per year. Selling hoodies, however, would cause sales of conventional jumpers to decrease by 1,000 units per year. The jumpers sell for $43 per unit. The variable costs of production are $25 per unit for hoodies and $20 per unit for jumpers. If the company adds hoodies to its range of products, fixed costs will increase by $56,000 per year and annual depreciation will increase by $21,000. What is the incremental operating cash flow from selling hoodies, if the corporate tax rate is 30%?
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A clothing manufacturer is considering whether to add hoodies to its range of products. The hoodies would sell for $45 each and the company expects to sell 10,000 units per year. Selling hoodies, however, would cause sales of conventional jumpers to decrease by 1,000 units per year. The jumpers sell for $43 per unit. The variable costs of production are $25 per unit for hoodies and $20 per unit for jumpers. If the company adds hoodies to its range of products, fixed costs will increase by $56,000 per year and annual
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- Karens Quilts is considering the purchase of a new Long-arm Quilt Machine that will cost $17,500 and will increase her fixed costs by $119. What would happen if she purchased the new quilt machine to realize the variable cost savings of $5.00 per quilt, and what would happen if she raised her price by just $5.00? She feels confident that such a small price increase will not decrease the sales in units that will help her offset the increase in fixed costs. Given the following current prices how would the break-even in units and dollars change? Complete the monthly contribution margin income statement for each of these cases.29) Foamsoft sells customized boat shoes. Currently, it sells 16,850 pairs of shoes annually at an average price of $75 a pair. It is considering adding a lower-priced line of shoes which sell for $59 a pair. Foamsoft estimates it can sell 4,500 pairs of the lower-priced shoes but will sell 1,100 fewer pairs of the higher-priced shoes by doing so. What is the estimated value of the erosion cost that should be charged to the lower-priced shoe project?Groove auto is considering the introduction of a new model of wireless speakers with the following price and cost characteristics.sales price 443.00 per unit.variable cost 203.00 per unit.fixed costs 715,000assume that the projected number of units sold for the year is 4 400.consider requirement b,c,d independent from each other. [a] What will the operating profit be? [b] What is the impact of operating profit if the sales price decreases by twenty percent increases by ten percent? [c] What is the impact on operating profit A veritable cost per unit decrease by ten percent increase by twenty? [d] Suppose that fixed costs for the year are 20% lower. Than projected and bearable costs per unit are 10% higher than projected. What impact will these costs changes have on operating profit for the year Kindly solve b c and d
- Grove Audio is considering the introduction of a new model of wireless speakers with the following price and cost characteristics. Sales price $ 450.00 per unit Variable costs 210.00 per unit Fixed costs 764,000 per year Assume that the projected number of units sold for the year is 4,750. Consider requirements (b), (c), and (d) independently of each other. What will the operating profit be? What is the impact on operating profit if the sales price decreases by 20 percent? Increases by 10 percent? What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? Suppose that fixed costs for the year are 20 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much?11) Istanbul Company currently sells cellphones for $500. It has costs of $320. A competitor is bringing a new cell phone to market that will sell for $430. Management believes it must lower the price to $430 to compete in the market for cell phones. Marketing believes that the new price will cause sales to increase by 10%, even with a new competitor in the market. Istanbul Company sales are currently 100,000 cell phones per year. What is the target cost if the company wants to maintain its same income level, and marketing is correct (rounded to the nearest cent)? A) $224.00 B) $238.18 C) $266.38 D) $290.00 E) $311.001. ABC Taxi has an average fixed cost of $8,000 a year for each car. Each mile driven has variable cost $.40 and collect fares of $.60. How many miles a year does each car have to travel before making profit? a. ABC company is contemplating adding a new line of product, which will require leasing new equipment for a monthly payment of $12,000. Variable costs would be $15.00 per product, and selling price per product is $40. What would be profit or loss if business sell 600 of these products? b. If 800 quantity of products can be sold, and a profit target is $10,000, what price should be charged for each product?
- 1. What is the company's current breakeven in units and in dollars? 2. If the company expects to sell 260 premium garage doors in the upcoming year, and it does not develop the software control system, what is its expected operating income from premium garage doors? 3. If the software control system were to be developed and implemented, what would be the company's new breakeven point in units and in dollars? 4. If the company expects to sell 260 premium garage doors in the upcoming year, and it develops the software control system, what is its expected operating income from premium garage doors? 5. If the company expects to sell 260 premium garage doors in the upcoming year, do you think the company should implement the software control system? Why or why not? What factors should the company consider? pop-up content ends PrintDoneGrove Audio is considering the introduction of a new model of wireless speakers with the following price and cost characteristics. Sales price $ 430 per unit Variable costs 190 per unit Fixed costs 624,000 per year Assume that the projected number of units sold for the year is 3,750. Consider requirements (b), (c), and (d) independently of each other. Required: What will the operating profit be? What is the impact on operating profit if the sales price decreases by 20 percent? Increases by 10 percent? What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? Suppose that fixed costs for the year are 20 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much?Derby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics. Sales price $ 23 per unit Variable costs 6 per unit Fixed costs 24,000 per month Assume that the projected number of units sold for the month is 6,000. Consider requirements (b), (c), and (d) independently of each other. Required: What will the operating profit be? What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent? What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? Suppose that fixed costs for the year are 10 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much?
- Using sensitivity analysis The Circle Clock Company sells a particular clock for $25. The variable costs are $13 per clock and the breakeven point is 250 clocks. The company expects to sell 300 clocks this year. If the company actually Sells 400 clocks, what effect would the sale of additional 100 clocks have on operating income? Explain your answer.Derby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics. Sales price $ 21 per unit Variable costs 7 per unit Fixed costs 27,000 per month Assume that the projected number of units sold for the month is 7,000. consider requirements (b), (c), and (d) independently of each other. Required: a. What will the operating profit be? B. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent? c. What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? d. suppose that fixed costs for the year are 10 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much? complete this question by entering your…Derby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics. Sales price $ 21 per unit Variable costs 7 per unit Fixed costs 27,000 per month Assume that the projected number of units sold for the month is 7,000. consider requirements (b), (c), and (d) independently of each other. Required: a. What will the operating profit be? B. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent? c. What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? d. suppose that fixed costs for the year are 10 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much? complete this question by entering your…