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muminat
3 years ago
10

Free Spirit Industries Inc.’s marketing sales director doesn’t think that the market for the firm’s goods is big enough to sell

enough units to make the company’s target operating profit of $15,000,000. In fact, she believes that the firm will be able to sell only about 175,000 units. However, she also thinks the demand for Free Spirit Industries Inc.’s product is relatively inelastic, so the firm can increase the sale price. Assuming that the firm can sell 175,000 units, what price must it set to meet the CFO’s EBIT goal of $15,000,000?
Business
1 answer:
RSB [31]3 years ago
6 0

Answer:

In the attached the fixed costs is $12,000,000

selling price is $41.50

variable cost is $12.80

The price for the target EBIT of $15 million is $167.09

Explanation:

target units=fixed costs+target EBIT/selling price-variable cost

target units is 175,000

fixed costs of $12,000,000

target EBIT of $15,000,000

variable cost is $12.80

selling price is unknown,let assume is X

175,000=($12,000,000+$15,000,000)/X-12.80

175,000=27,000,000/X-12.80

175,000*(X-12.80)=27,000,000

X-12.80=27,000,000/175,000

X-12.80=154.29

X=154.29+12.80

X=$167.09

EBIT=Sales units*(selling price-variable cost)-fixed costs

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Andreyy89

Answer:

The correct answer is: focused differentiation strategy.

Explanation:

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Companies that offer Premium products / services as well as companies dedicated to the luxury sector have the strategy of focused differentiation as the axis of the company's operation.

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3 years ago
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Tinker's cost of goods sold in the year of sale (2019) was $790,000 and 2018 cost of goods sold was $810,000. The inventory at t
gladu [14]

Answer:

91 days

Explanation:

Here, we are to calculate the average number of days it will take to sell its inventory in 2019.

We proceed mathematically as follows;

Inventory turnover=COGS/Average inventory

Average inventory=(192,000 + 202,000)/2=$197,000

hence inventory turnover=(790,000/197,000)= 4.01

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6 0
3 years ago
The tax sheltered prgrma to encourage self employed people to acculumlate reitment funds is called?
romanna [79]

The tax sheltered prgrma to encourage self employed people to acculumlate reitment funds is called Keogh plan.

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1 year ago
The following are the stages of both consumer and organization purchase decisions. Place each stage in the most typical order of
777dan777 [17]

Answer:

Problem Recognition.

Information Search.

Evaluation of Alternatives.

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Post-Purchase Evaluation

Explanation:

1. Problem Recognition: This relates to the existence and realization of the  <u>need gap</u> between what they have and what they want.

2. Information Search: This is the next stage where the consumer begins to search for how to close the need gap.

3. Evaluation of Alternatives: After searching for  available information on potential way(s) to meet the existing need, the product of the search could reveal numerous alternatives from which a choice will be made after thorough evaluation

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3 years ago
The following data relate to a company that produces and sells a travel guide that is updated monthly: Each book sells for $20.0
Arturiano [62]

Answer:

10.30

Explanation:

20

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3 years ago
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