Martha Manufacturing produces a single product that sells for $80. Variable costs per unit equal $32. The company expects total
fixed costs to be $72,000 for the next month at the projected sales level of 2,000 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately. 1) What is the current breakeven point in terms of number of units?
2) Suppose management believes that a $16,000 increase in monthly advertising expense will result in a considerable increase in sale. Sale must increase by how much to justify this additional expenditure?
3) Suppose that management believes that a 10% reduction in the selling price will result in a 10% increase in sales. If this proposed reduction in selling price is implemented,
a) Operating income will decrease by $8,ooo
b) Operating income will increase by $8,000
c) Operating income will decrease by $16,000
d) Operating income will increase by $16,000.
24,000 is the profit they would make for hitting their goal.
Question 1: What is the break-even point? The break-even means they make no money, but they also lose no money. So that final number (24,000) would be 0 instead. How many units would they have to make to hit zero? (x * 80) - (x * 32) - 72,000 = 0. 80x - 32x = 72,000 48x = 72,000 x = 1500 units
We can verify by using our first formula we've already determined, using this new value for units. (1,500* 80) - (1,500 * 32) - 72,000 = ? 120,000 - 48,000 - 72,000 = 0? True!
Question 2: If they increase their expenses by 16,000, what is their new break even point?
Filtering in communication occurs when information passed on between two bodies is being reduced by the middlemen, where the middlemen are not able to communicate favourable with either party and it affects either of the party, it's called filtering. The inability for the salesperson's to communicate the technical knowledge of the product to the customers which they are being taught during trainings is known as filtering in communication. This causes the business loss as the customers are not able to operate the equipment effectively which the business sells.
Although the Fiscal policy includes the detail of government revenue collection and its spending and military budget is allocated in the budget as part of the policy, however after the incident of 9/11, the increase in military spending (including spending on wars in Iraq and Afghanistan) was designed to achieve homeland security objectives.
White House designated the Office of Homeland Security to oversee and coordinate a comprehensive national strategy to safeguard the country against terrorism and respond to any future attacks.