Disadvantages of opening a new store location

Flannigan Company manufactures and sells a single product that sells for $450 per unit; variable costs are $270. Annual fixed co

uysha [10]

Answer: The company's current sales is 9,333 units.

It has to sell a total of 10,695 units in order to achieve a target pre tax income of $1,125,000.

First we calculate the number of units sold at the current sales level.

We compute this as:

$\frac{Sales}{Price per unit} = \frac{4,200,000}{450} = 93333.33 units$

Next we find the contribution margin per unit.

$Contribution margin per unit = Selling Price - Variable Cost$

$Contribution margin per unit = 450 - 270$

Contribution Margin per unit is $180.

Flannigan Company's current per-tax income is calculated as :

Sales 4200000

less:Variable costs @ $270 for 9333.33 units -2520000

Contribution 1680000

less:Fixed Costs -800000

Pre tax income 880000

With this information, we can calculate the Contribution Margin required if the pre tax income should be $1,125,000. We work backwards in order to find the Contribution Margin from Pre-tax income.

Targeted Pre Tax income $1,125,000

Add: Fixed Costs $ 800,000

Contribution Margin $1,925,000

Since we know the per unit contribution, we can calculate the number of units to be sold as:

$Targeted sales in units = \frac{New contribution margin}{Contribution per unit}$

$Targeted sales in units = \frac{1,925,000}{180} = 10,694.44$

Since products can't be sold in parts, any decimal value after a whole number will be rounded up. Hence the targeted sales will be 10,695 units.

7 0

3 years ago

Read 2 more answers

Gundy Company expects to produce 1,299,600 units of Product XX in 2017. Monthly production is expected to range from 73,600 to 1

SCORPION-xisa [38]

Monthly Flexible Manufacturing Budget

For the Year 2017

Activity level

Finished units 73,600 96,200 118,800

Variable costs

Direct materials($3) $220,800 $288,600 $356,400

Direct labor($6) $441,600 $577,200 $712,800

Overhead($9) $662,400 $865,800 $1,069,200

Total variable costs $1,324,800 $1,731,600 $2,138,400

Fixed cost

Depreciation[($6 * 1,299,600) 12] $649,800 $649,800 $649,800

Supervision[($2 * 1,299,600) / 12] $216,600 $216,600 $216,600

Total fixed costs $866,400 $866,400 $866,400

Total costs $2,191,200 $2,598,000 $3,004,800

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3 years ago

Several economists have recognized the limits of fiscal policies when attempting to stabilize or aid economic recovery. During t

Bond [772]

Answer:

There are following lags:

1. Data Lags: Many macroeconomic information arrangement, for example, GDP are just accessible with a significant slack, and they are dependent upon huge modifications. Along these lines, data strategy creators utilize is review, not contemporaneous. Getting data about the present condition of the economy is troublesome, we don't have great data until months after the economy has just changed course.

2. Recognition Lags: Once the information are at last accessible it requires some investment to make sense of what they are stating. Is the downturn in work right now transitory, or the start of a more extended term pattern? In the event that it's brief, no compelling reason to act, however on the off chance that it's lasting, at that point activity might be required.

3. Legislative Lag: Once we've gotten the essential information and closed something must be done, there can be impressive slacks in the authoritative procedure as administrators banter the specific type of the bundle, or contradict it out and out.

4. Implementation Lag: Once a strategy is spent, it sets aside some effort to establish it, for example to set up the organization of the cash, to convey it to the correct offices, to make the arrangements expected to spend it, and so forth.

5. Impact Lag: After the entirety of that, and the strategy is at last instituted, it sets aside effort for arrangement to hit the economy and produce results. For money related approach if can be a year to eighteen months before the pinnacle impact of the arrangement is felt (however the administrative lags are a lot shorter since the FOMC can act quicker than congress). The viability slack for financial strategy is somewhat shorter, yet at the same time impressive, a half year at any rate.

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3 years ago

How many international airports are in cote d'ivoire?

uranmaximum [27]

1 internation airport and its called the Ivory Coast

3 0

3 years ago

In business ethics, which of the following is not an adequate moral claim of economic theory?

Pani-rosa [81]

A business is a productive organization—an organization whose purpose is to create goods and services for sale, usually at a profit. Business is also an activity. One entity (e.g., a person, an organization) “does business” with another when it exchanges a good or service for valuable consideration. Business ethics can thus be understood as the study of the ethical dimensions of productive organizations and commercial activities. This includes ethical analyses of the production, distribution, marketing, sale, and consumption of goods and services

3 0

3 years ago