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?
Compared to the McLaren, the Lamborghini has less power, a heavier engine, and less active aerodynamic designs. This allows the Huracán Performante to be an excellent supercar with extreme sounds, feels, and the excitement of a Lamborghini, but in performance the McLaren is superior.
The market equilibrium is the price at which the quantity demanded and the quantity supplied cross each other. The intersection could be made by supply and demand curves.
Therefore, there is a direct relationship between the price and the quantity supplied, while the price and quantity demanded have an inverse relationship.
When the quantity demanded and the quantity supplied are intersect at the price so we called market equilibrium
The Journal entry which Nicholson company will prepare on June 2 will be like when goods are returned the reverse entry is made which is
Accounts Payable A/c Dr. $480
Purchase Return / Inventory A/c Cr. $480
A journal entry is an act of recording any transaction, whether it is economic or not. Multiple recordings, each of which is either a debit or a credit, may be included in the journal entry.
Accounting journal entries are transferred from the journals and posted to the general ledger in order to record financial transactions in the accounting system. Modern accounting software handles the majority of this process automatically, but it's crucial to understand what's going on since there are instances when manual entries will need to be made to adjust or correct account balances at the conclusion of an accounting month.
Under such a scenario, it is important to highlight that the SWOT analysis is useful to spot the internal Strengths and Weaknesses of the firm as well as the external Opportunities and Threats of the market. The SWOT analysis is a helpful tool that allows companies to understand what their core competencies are as well as the components that need improvement. At the same time, the SWOT analysis gives the firm an idea of what are the sectors of the market that could bring potential profits for the entity and which ones represent potential losses.
