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]
2 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]2 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
As the price of good X rises from $10 to $12, the quantity demanded of good Y rises from 100 units to 114 units. Are X and Y sub
Darina [25.2K]

Answer: Substitute

Explanation:

Substitute goods are the goods that can be used for the same purpose. Complement are the goods that are used together e.g. car and petrol.

It should be noted that when the price of a good increase, people move to the substitute and this will being about the rise in the quantity demanded of the other good.

Therefore, as the price of good X rises from $10 to $12, the quantity demanded of good Y rises from 100 units to 114 units shows that the are substitutes.

4 0
2 years ago
Which sentence is not a correct use
Molodets [167]
Definitely C. Doesn’t even make sense
4 0
3 years ago
Read 2 more answers
Knowledge Check 01 On January 1, Year 1, Abbott Company granted 92,000 stock options to certain executives. The options are exer
Westkost [7]

Answer:

$153,333

Explanation:

Calculation to determine What amount should Olympic recognize as compensation expense for 2016

Using this formula

Compensation expense =Total compensation/Vesting period

Let plug in the formula

Compensation expense=($5 x 92,000)/3 years

Compensation expense=$460,000/3 years

Compensation expense=$153,333

Therefore What amount should Olympic recognize as compensation expense for 2016 is $153,333

5 0
2 years ago
The formula for the production budget is budgeted sales in units plus desired ending merchandise inventory less beginning mercha
Deffense [45]

Answer:

desired ending finished goods units less beginning finished goods units.

Explanation:

production budget can be regarded as budget that gives the calculation of the number of units of particular products which is needed to be manufactured, this is comprises the sales forecast as well as amount of finished goods inventory that is planned to have on hand.

It should be noted that the formula for the production budget is desired ending finished goods units less beginning finished goods units..

7 0
2 years ago
For each of the following scenarios, identify the number of firms present, the type of product, and the appropriate market model
marshall27 [118]

Answer:

Number of Firms - many

Type of Product - differentiated

Market Model - monopolistic competition

Number of Firms - many  

Type of Product - standardised  

Market Model - perfect competition

Number of Firms - few  

Type of Product - standardised  

Market Model - oligopoly

Number of Firms - one

Type of Product - unique

Market Model - monopoly

Explanation:

A perfect competition is characterized by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.   In the long run, firms earn zero economic profit.  If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.  

Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.  

A monopolistic competition is when there are many firms selling differentiated products in an industry. A monopoly has characteristics of both a monopoly and a perfect competition. the demand curve is downward sloping. it sets the price for its goods and services.

An example of monopolistic competition are restaurants  

A monopoly is when there is only one firm operating in an industry. there are usually high barriers to entry of firms. the demand curve is downward sloping. it sets the price for its goods and services.

An example of a monopoly is a utility company

An Oligopoly is when there are few large firms operating in an industry. While, a monopoly is when there is only one firm operating in an industry.

Oligopolies are characterised by:

  • price setting firms  
  • profit maximisation
  • high barriers to entry or exit of firms
  • downward sloping demand curve

3 0
2 years ago
Other questions:
  • A limited liability corporation's (LLC) equity is reported similar to that of a a.trust. b.regular corporation. c.partnership. d
    13·1 answer
  • What's wrong with this slide?
    6·1 answer
  • "______ accounting uses adjusting entries to reflect economic reality even when there is _______ involved in the transaction. Th
    8·1 answer
  • Sarah invests $2,700 today in an account that pays 6 percent interest compounded annually. She wants to know the total balance i
    11·1 answer
  • Kathryn is shopping and needs to choose a combination of pants and shirts to buy. She has a total of $24 to spend. Each pair of
    7·1 answer
  • how all calculations: Palmer Inc. currently produces 110,000 units at a cost of $440,000. Next year Palmer Inc. expects to produ
    10·1 answer
  • How does the price of oil impact the price of food?
    8·1 answer
  • What is the width of the product mix?
    15·1 answer
  • Graff, Incorporated, has sales of $49,500, costs of $22,800, depreciation expense of $2,200, and interest expense of $1,950. If
    5·1 answer
  • Vernon Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-qualit
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!