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Irina18 [472]
3 years ago
7

The Covington Engine Company is considering opening a new plant facility to build truck engines. As part of a detailed analysis

of the proposed facility, Covington’s management wants some information on the cash breakeven point. Fixed costs for the facility are expected to be $6 million a year, including depreciation expenses of $800,000 a year. The engines’ sales price is expected to be $7,000 per unit, and the variable cost is expected to be $3,000 per unit. Calculate the expected annual cash breakeven point and the expected annual cash breakeven sales.
Business
1 answer:
olganol [36]3 years ago
3 0

Answer:

Cash breakeven point = (Fixed Assets - Depreciation) / Contribution Margin

Contribution Margin = Sales Price - Variable Cost

Cash Breakeven point

= ( 6,000,000 - 800,000) / ( 7,000 - 4,000)

= 1,300 units

Expected Annual Breakeven sales

= Cash breakeven point * Sales price

= 1,300 units * 7,000

= $9,100,000

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Sales revenue equals $367,810, sales returns & allowances are $10,000, and sales discounts total $14,180. The cost of goods
Sliva [168]

Answer:

The correct option is C,net sales equal $343,630 and gross profit is $127,140

Explanation:

The net sales is the sales revenue minus sales returns and allowances as well as sales discount,hence net sales is computed thus:

Sales revenue                                              $367,810

Sales returns and allowances                     ($10,000)

Sales discounts                                            ($14,180)

Net sales                                                       $343,630

The gross profit is net sales of $343,630 less costs of goods sold of $216,490

Net sales                                $343.630

Cost of goods sold               ($216,490)

Gross profit                            $127,140

Hence option C is the correct answer

3 0
3 years ago
The Marketing Department has proposed increasing the West Division's monthly advertising by $15,000 based on the belief that it
kramer

Answer:

Net Increase in profit is $27,000

Explanation:

* The data was missing in this question, a similar question is attached with the answer, and answer is made accordingly. Please find it.

Sales  ( $350,000 x 120% )  =                     $420,000

- Variable cost ( 40% )  =                             $168,000

- Traceable fixed cost( 175000+15000) =  <u>$190,000</u>

Net Profit =                                                   $62,000

Net Increase in Net Income = $62,000 - ( 350,000 - (350,000 x 40%) - 175,000 ) = 27,000

6 0
4 years ago
Which one of the following represents the expanded basic accounting equation?
DaniilM [7]

Answer:

Option B.

Explanation:

Basic accounting equation is

Assets = Liabilities + Equity

where,

Equity = Capital + Retained earnings

Retained earnings = Revenue - Expenses - Dividend

On combining these formula, we get

Assets = Liabilities + Capital + Revenue - Expenses - Dividend

It can be rewritten as

Assets + Dividend + Expenses = Liabilities + Capital + Revenue

Assets + Dividends + Expenses = Liabilities + Common stock + Retained Earnings + Revenues

Therefore, the correct option is B.

4 0
4 years ago
Alexis bought a stock for $34 a share two years ago. The stock does not pay any dividends. Today she sold the stock for $28.50 a
JulijaS [17]

Answer:

internal rate of return -16.17%

Explanation:

The internal rate of return is negative because the investment didn't receive dividends for two years. It means that the stock lost value. How much? 16.17% of its value in two years.

<h2>34 * (1 - 16,17%) = 28.5 </h2>

3 0
3 years ago
TrueBlue uses an evaluation form for sales reps which lists several specific behaviors, such as "follows up on customer leads" a
Damm [24]

Answer:

True

Explanation:

The term business operating system (BOS) refers the to standard, enterprise-wide collection of business processes that are used in many diversified industrial companies.

It refers to a collection of the business processes that can be used to boost the efficiency of each function of the business. It includes the fundamental framework, policies and routines which are needed to operate and grow a business.

It has been adopted by companies like; The Lego Group, Toyota Motor Corporation and The Boeing Company.

8 0
4 years ago
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