1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
barxatty [35]
3 years ago
15

Rather than purchase new equipment, the marketing manager argues that the company's marketing strategy should be changed. Rather

than pay sales commissions, which are currently included in variable expenses, the company would pay salespersons fixed salaries and would invest heavily in advertising. The marketing manager claims this new approach would increase unit sales by 50% without any change in selling price; the company's new monthly fixed expenses would be $331,200, and its net operating income would increase by 25%.
Compute the break-even point in dollar sales for the company under the new marketing strategy.

Morton Company's contribution format income statement for last month is given below:

Sales (46,000 units * $24 per unit) $1,104,000
Variable expenses $772,800
Contribution margin $331,200
Fixed expenses $264,960
Net operating income $66,240
Business
1 answer:
Kitty [74]3 years ago
5 0

Answer:

Break-even point (dollars)= $1,104,000

Explanation:

Giving the following information:

The company's new monthly fixed expenses would be $331,200.

Selling price= 24

Unitary variable cost= (772,800/46,000)= 16.8 per unit

With this information we can calculate the break-even point both in units and dollars:

Break-even point= fixed costs/ contribution margin

Break-even point= 331,200/ (24 - 16.8)= 46,000 units

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 331,200/ (7.2/24)= $1,104,000

You might be interested in
The General Store at State University is an auxiliary bookstore located near the dormitories that sells academic supplies, toile
Nookie1986 [14]

Answer:

A) it will need to sale 5193 pizzas

B) selling 20 per day it will take 260 days

C) if price decrease by 1 dollar to 7.95 the new BEP will be 6,429 dollars

and will take 322 days to achieve break even

Explanation:

fixed cost: 27,000 oven

sales price 8.95

variable cost 3.75 frozen pizza:

contribution margin: 5.2

break even:

27,000 dollars / 5.2 dollar per pizza= 5.192,30

5,192 pizzas / 20 per day = 259.6 days

If sale price decrease by one dollar:

27,000 dollar / 4.2 contribution per pizza=  6.428,57

6,429 / 20 per day = 321.4

8 0
3 years ago
Read 2 more answers
Is Starbucks bucking the trend of other food-service stores?
Bond [772]
Mhm yeah I think soooo lol
5 0
2 years ago
Given the following information, compute the property tax rate for the community in percentage terms. Total budget expenditures:
tangare [24]

Answer:

B) 4.0%

Explanation:

to calculate the property tax rate we can use the following formula:

property tax rate = (total budget - non property tax income) / (total asses value of properties - total exemptions)

property tax rate = ($108 - $50) / ($2,000 - $550) = $58 / $1,550 = 0.037 ≈ 4%

6 0
3 years ago
What group is responsible for stepping in to prevent a bank run?
timurjin [86]
<span>What group is responsible for stepping in to prevent a bank run is</span>banking regulators like the Fed.

I hope this helps!
4 0
3 years ago
Read 2 more answers
After you had assigned the "1," "2," and "3" risk impact/risk factor values to the identified risks, threats, and vulnerabilitie
slega [8]
We prioritize it by the number of orders given to a certain directive.
4 0
3 years ago
Other questions:
  • "interest payments are payments made – current owners of –. because these payments are determined by the level of government – a
    9·2 answers
  • First National Bank charges 11.1 percent compounded monthly on its business loans. First United Bank charges 11.3 percent compou
    9·1 answer
  • Cheizza, a pizza vendor in the country of Wisbane, believes that the taste of fresh cheese in its pizzas is its unique selling p
    8·1 answer
  • Peter pine is doing his budget. he discovers that he has spent an average of $225.00 a month on entertainment for the year with
    12·1 answer
  • Strike, a clothing manufacturer from Minnesota, offered to sell Bailey, the owner of a clothing store in Colorado, one thousand
    6·1 answer
  • Jack and Mary, a married couple, report taxable income of $280,000, which includes $200,000 from Jack's solely owned S corporati
    8·1 answer
  • The 6-month futures price on a non-dividend-paying stock is $36.20. the risk-free rate is 2.75 percent and the market rate is 9.
    5·1 answer
  • Carlos has a small fashion company. He has been in business for a little over a year and the company looks like it is going to d
    10·2 answers
  • Think of two advertisements that you have seen recently, one that you like and one that you dislike. What is each ad trying to s
    12·1 answer
  • The three methods used to classify costs into their fixed and variable components includes:.
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!