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AURORKA [14]
3 years ago
15

Thad Morgan, a motorcycle enthusiast, has been exploring the possibility of relaunching the Western Hombre brand of cycle that w

as popular in the 1930s. The retro-look cycle would be sold for $14,000 and at that price, Thad estimates 600 units would be sold each year. The variable cost to produce and sell the cycles would be $9,800 per unit. The annual fixed cost would be $1,890,000.
a. What is the break-even in unit sales?
Break-even in unit sales
b.
What is the margin of safety in dollars (Omit the "$" sign in your response.)


Margin of safety in dollars $
c. What is the degree of operating leverage? (Round your answer to 2 decimal places.)
Degree of operating leverage
Thad is worried about the selling price. Rumors are circulating that other retro brands of cycles may be revived. If so, the selling price for the Western Hombre would have to be reduced to $11,000 to compete effectively. In that event, Thad would also reduce fixed expenses to $1,456,000 by reducing advertising expenses, but he still hopes to sell 600 units per year.
d. What would the net operating income be in this situation? (Negative amount should be indicated by a minus sign. Omit the "$" sign in your response.)
Business
1 answer:
AleksandrR [38]3 years ago
5 0

Answer:

Explanation:

a. Break even in unit sales =  (Fixed expenses ) ÷ (Contribution margin per unit)

= $1,890,000 ÷ ($14,000 - $9,800)

= 450  units

b. Margin of safety = Expected sales - break even sales

= ($14,000 × 600) - ($14,000 × 450)

= $2,100,000

Contribution margin  = Sales - Variable cost

= ($14,000 × 600) - ($9,800 × 600)

= $2,520,000

Profit before earning and tax  = Contribution margin - Annual fixed cost

= $2,520,000 - $1,890,000

= $630,000

c. Degree of operating leverage = Contribution ÷  Profit before earning and tax

= $2,520,000 ÷ $630,000

= 4

d. Loss on Net operating income = (Sales) - (Variable cost) - Fixed expenses

=($11,000 × 600) - ($9,800 × 600) - $1,456,000

= -$736,000

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A pre-concert rehearsal is an example of
Mrrafil [7]

Answer:

Quality control

Explanation:

Six Sigma is a quality business management strategy which helps business organizations to improve the quality of processes, products and services by discovering and eliminating defects, variations or errors. It is a strategic business concept that was developed in 1986 by Motorola.

Under the six sigma approach, any process that doesn't provide customer satisfaction or causes challenges in an organisation's process should be eliminated from the system in order to produce quality products and services. It allows only 3.4 defective features for every million opportunities and as such expects processes to be defect free 99.99966 percent of the time.

Generally, there are two (2) main methods of achieving the six sigma approach;

1. DMAIC: define, measure, analyze, improve and control.

2. DMADV: define, measure, analyze, design and verify.

Hence, a pre-concert rehearsal is an example of quality control because the participants or team members are made to practice their routines so as to master them and prevent mistakes on the day of the concert. Thus, a pre-concert is aimed at getting the best out of a team in order to deliver a quality performance to the audience.

5 0
2 years ago
Morgan Company issues 9%, 20-year bonds with a par value of $750,000 that pay interest semiannually. The current market rate is
Leno4ka [110]

Answer:

$33,750

Explanation:

Given that

Bond per share = $750,000

Issued Amount = 9%

The computation of amount which is to be paid to the bondholders for every semi-annual interest payment is given below :-

Interest payment = bond per share × issued amount × (number of months ÷ total number of months in a year)

= $750,000 × 9% × 6 months ÷ 12 months

= $33,750

7 0
2 years ago
At Abendreg, a multinational law firm, only English-speaking trainers are given the opportunity to impart training to employees
geniusboy [140]

Answer:

Adverse impact

Explanation:

Adverse impact is the unpleasant effect of a bias segmentation of a particular group during selection procedures such as employment, hiring, training, layoff or appraisal processes. Adverse impact in a work place processes may give rise to discrimination directed to a particular group base on a given attributes such as qualifications, ability, age, gender etc.

In this question, the company has most of its branches in English-speaking countries hence they only gave preferences to English-speaking trainers to impart training to employees in different countries

7 0
3 years ago
Deb and Rusty know that buying a house will save them money on taxes because they get to deduct the interest they pay to the ban
Margarita [4]

Answer:

Their income after 20 years would be 72,550 dollars.

Explanation:

The income after 20 years can easily de determin by using compounding

formula

Future Value = Present Value (1 + I)^ 20

                      = 90,000 (1 + 0.03)^ 20

                      = 162,550 dollars

Income can be determing by subtracting Pv from Fv i.e

Income = 162,550 - 90,000 = 72,550

Calculation on excel sheet

       A                        B                  C                         D                

1     90,000             1.03            = A1 * 1.03        = C1-A1        

2      = D1                  1.03           = A2 * 1.03       = C2-A2

20    = D19               1.03           = A20 * 1.03      = A20 - C20

* In work sheet colunm D will show income on investment.

4 0
3 years ago
What is the formal agreement between two or more countries trade,peace and other matters called?
Arlecino [84]
Pretty sure its a treaty

5 0
3 years ago
Read 2 more answers
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