QUESTION 8Toy Story, Inc., has the capacity to produce 100,000 toys per year but only produces 80,000 toys per year. The sale price is $10, the variable costis $7 and allocated overhead equals $80,000 per year. Company B offers to buy an additional 18,000 toys but is only willing to pay $5 per toy.What is the additional operating income (loss) of accepting the offer?ENTER NEGATIVE NUMBERS WITH A "-" SIGN. DO NOT USE PARENTHESES. EXAMPLE: -10,000

In case of special order the costs that should be considered is only variable cost. Allocated…

Answered: QUESTION 8 Toy Story, Inc., has the…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter4A: Nopat Breakeven: Revenues Needed To Cover Total Operating Costs

Section: Chapter Questions

Problem 1EP

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Question 5 Micol & Co. Ltd sells a single product, baby hamper, with a selling price of $150 and variable costs per baby hamper of $100. The company’s monthly fixed expenses are $200,000. Required: a) What is the company’s break-even point in units? b) What is the company’s margin of safety in dollars, assume sales is expected to be $800,000? c) How many baby hampers will Micol & Co. Ltd need to sell (in sales dollars) in order to realize a target profit of $500,000? d) Construct a contribution margin income statement for the first month (in July) that reflects $2,400,000 in sales revenue for Micol & Co. Ltd. e) Provide two suggestions to Micol & Co. Ltd on how it can increase profit in subsequent months? SHOW YOUR WORKING
XYZ company currently sells 15,000 units a month for $50 each, has variable costs of $10 per unit, and fixed costs of $300,000. The company is considering increasing the price of its units to $60 per unit. If the price is changed, how many units will the company need to sell for profit to remain the same as before the price change? Select one: O a. None of the given answers. O b. 7,500 O c. 11,250 O d. 9,000 O e. 12,000
SHOW COMPLETE SOLUTION Problem 3: ABC Corporation manufactures a certain product that sells for P5,000 each.The company’s maximum production capacity is 360 units per year. At present it is able toproduce and sell 280 units a year. The cost to manufacture each product is P2,400 and thefixed operating cost per year is P520,000. What is the break – even sales volume of the product per year? What is the profit per year based on the present production – sales status? What is the loss if only 150 units were produced and sold in a year?
XYZ company currently sells 15,000 units a month for $50 each, has variable costs of $20 per unit, and fixed costs of $300,000. The company is considering increasing the price of its units to $65 per unit. If the price is changed, how many units will the company need to sell for profit to remain the same as before the price change? Select one: а. 10,000 b. 9,000 c. None of the given answers. d. 7,500 е. 11,250
Question 1 What would be the BEP in units sales if the company decides to: Increase the Sales Price from $100 to $105 by spending annually $5000 for advertisement. Question 2 What would be the BEP in units sales if the company decides to: Increase the Sales Price from $100 to $105 and cutting the fixed salary of the salespeople by $15000 and instead provides them $10 per unit commission?Question 3 Which one of the following options provides better units BEP for the company? Option A: Increase the Sales Price from $100 to $105 by spending annually $5000 for advertisement. Option B: Increase the Sales Price from $100 to $105 and cutting the fixed salary of the salespeople by $15000 and instead provides them $10 per unit commission. Option A Option B Both options are same None of the OptionsUse the available pick lists from within the three boxed areas to change values, noting how the break-even units change within the green - shaded area. Think critically about why the changes in…
Q3The Fresno Company manufactures slippers and sells them at $13 a pair. Variable manufacturing cost is $6.50 a pair, and allocated fixed manufacturing cost is $2.00 a pair. It has enough idle capacity available to accept a one-time-only special order of 5,000 pairs of slippers at $8.50 a pair. Fresno will not incur any marketing costs as a result of the special order. What is the amount of increase in operating income if the special order is accepted?
PAGE 1.1 NUBD Co. plans to market a new product. Based on its market studies. It estimates that it can sell 70,000 units in 2021. The selling price per unit is P2.00. Variable cost ratio is 40% of sales. Fixed costs are estimated to be P60,000. A.Compute the break-even point in units. B.Compute the break-even point in sales pesos.
Q1. Zeal Corporation is thinking about the dropping of its product Z. Sales of the product total Rs.400,000 per year; variable expenses total Rs. 270,000 per year. Fixed expenses charged to the product total Rs. 150,000 per year. The company estimates that Rs. 70,000 of these fixed expenses are not avoidable even if the product is dropped. If Product Z is dropped, what will be the net increase or decrease in profit of the company?
QUESTION 6 Big Seats has the capacity to produce 100,000 sofas per year but only produces 80,000 sofas per year. The sale price is $1,000 each. Direct materials equals $200 per sofa, direct labor equals $200 per sofa, and allocated overhead equals $100,000 per year. Buy & Large offers to buy an additional 2,000 sofas but is only willing to pay $800 per sofa. What is the additional operating income (loss) of accepting the offer? ENTER NEGATIVE NUMBERS WITH A "-" SIGN. DO NOT USE PARENTHESES. EXAMPLE: -10,000
Question 1. A company wants to produce a new product. In order to produce this product, the fixed cost is $40,000 and the variable cost is $15 per product. a. Assume that the purchase price for the product is $55, and the estimated demand for this product is 2000 units. Then, what is your suggestion to the company? To produce or not, and if yes, how many? [provide your reasonings] b. Answer part (a) but with an estimated demand of 900 units. [provide your reasonings] c. Assume that demand depends on the purchase price so that it would be 1000 and 2000 if the purchase price is $100 and $55 respectively. Then, what purchase price do you suggest to the company? [provide your reasonings]
For items 22 to 24: The Warner Company sells its only product for P30 and the variable costs amount to P21 per unit. Fixed cost for each year is P270,000. 22. Assuming the desired profit for next year (if all costs and selling price remains the same) is placed at P90,000, what is the margin of safety in units? A. 30,000 B. 20,000 C. 10,000 D. 40,000 23. What will be the projected sales in pesos with such desired profits of P90,000? A. P 900,000 B. P 1,200,000 C. P 300,000 D. P 600,000 24. If instead, the desired profit is 5% of sales, how many units must be sold to achieve such A. 36,000 B. 40,000 C. 25,714 D. 31500
Use this information for Stryker Industries to answer the question that follow. Stryker Industries received an offer from an exporter for 30,000 units of product at $19 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price $23 Unit manufacturing costs: Variable 10 Fixed 5 What is the amount of income or loss from the acceptance of the offer? Oa. $300,000 loss Ob. $690,000 loss Oc. $570,000 income Od. $270,000 income Previous Next 7:36 PM CP 12/13/2020

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