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3 years ago

EA10.

Business

1 answer:

antoniya [11.8K]3 years ago

8 0

Answer:

The question is incomplete; the complete question is given below.

Selling Price per unit Variable cost per unit

Product $ $

Snowboards 20.00 170.00

Skis 400.00 225.00

Poles 50.00 20.00

Salvador's contribution margin is 46.2%

Explanation:

Contribution is the amount generated from the sales of a product to cover part of the total fixed cost.

Contribution is an important concept in decision making because it helps to determine the profitability of individual products where a set of products benefit from the same fixed cost. it helps in prioritizing the allocation of resources to different products based on their profitability .

Contribution per unit = Selling price per unit- variable cost per unit

Total contribution= Contribution per unit * units sold

Contribution margin ration: The proportion of sales realised as contribution is known as contribution margin ratio (CMR) . It represents the amount generated as contribution from every one dollar worth of sales. A 60% margin means that $60 is made as contribution from evry sales of $100, for example.

It is a calculated as follows:

Single-product scenario:

C.M.R= contribution per unit/ selling price per unit

Multiple-products scenario:

C.M.R= contribution from a mix / revenue from a mix

We shall use the multiple-products formula

Snowboard ski Poles Total

$ $ $

Selling price 320 400 50

variable cost (170) (225) (20)

Contribution per unit (SP-VC) 150 175 30

Cont from a mix (cont× unit) 1050 525 60

Revenue from a mix (SP× unit) 2240 1200 100

Contribution margin ratio= Cont. from a mix/ Rev from a mix

= (1050+525+60)/(2240+1200+100)

=(1635 / 3540) × 100

= 46.2 %

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The Express Meal has two restaurants that are open 24 hours a day. Fixed costs for the two restaurants together total $ 451 comm

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Answer:

(1) $1,230,000

(2) 110,000 customers

Explanation:

Given that,

Fixed cost = $451,000 per year

Average sales check per customer = $ 8.20

Average cost of food and other variable costs for each customer = $ 4.10

Income tax rate = 30%

Target net income = $114,800

(1) Contribution margin ratio:

= (Selling price - Variable price) ÷ Selling price

= ($ 8.20 - $ 4.10) ÷ $ 8.20

= 0.5

Income before tax:

= Net income ÷ (1 - Tax rate)

= $114,800 ÷ (1 - 0.3)

= $164,000

Desired revenue (dollars):

= (Fixed cost + Income before tax) ÷ Contribution margin ratio

= ($451,000 + $164,000) ÷ 0.5

= $1,230,000

(2) Customers are needed to break even:

= Fixed cost ÷ contribution per unit

= $451,000 ÷ ($8.20 - $4.10)

= $451,000 ÷ $4.10

= 110,000 customers

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3 years ago

Puffy Shirt Inc's common stock has a beta of 1.2. If the risk free rate of return is expected to be 4% and the market risk premi

OleMash [197]

Answer:

The required rate of return is 17.2%

Explanation:

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Where,

rRF is the risk free rate.
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Answer:

The Concept of Opportunity Cost

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According to the question, money and resources devoted to war on terrorism represents the choice of the nation and the benefits maybe that the country is free from terrorist attacks. However, the opportunity cost is that the benefit of freedom from terrorist attacks comes at the expense of goods that could have been produced if the country should choose to pursue production of goods.

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3 years ago

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Answer:

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2. If we assume the use of equity method then.

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