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
Vikki [24]
3 years ago
9

Marketing Docs prepares marketing plans for growing businesses. For 2017, budgeted revenues are $1,500,000 based on 500 marketin

g plans at an average rate per plan of $3,000. The company would like to achieve a margin of safety percentage of at least 45%. The company’s current fixed costs are $400,000 and variable costs average $2,000 per marketing plan. (Consider each of the following separately.) Required Calculate Marketing Docs’ breakeven point and margin of safety in units. Which of the following changes would help Marketing Docs achieve its desired margin of safety? The average revenue per customer increases to $4,000. The planned number of marketing plans prepared increases by 5%. Marketing Docs purchases new software that results in a 5% increase to fixed costs but reduces variable costs by 10% per marketing plan.
Business
1 answer:
pishuonlain [190]3 years ago
7 0

Answer:

Option (a) is correct.

Explanation:

Contribution margin per marketing plan = Sales - Variable cost

                                                                   =  $3,000 - $2,000

                                                                   = $1,000

A.

(1) Break-even\ in\ rooms=\frac{Fixed\ cost}{contribution\ margin\ per\ marketing\ plan}

Break-even\ in\ rooms=\frac{400,000}{1,000}

Break even in marketing plan = 400

(2) Break-even in dollars:

= Break-even in marketing plan × Average rate per plan

= 400 × 3,000

= 1,200,000

(3) Margin of safety = Actual sales - Break-even sales in dollars

                                = 1,500,000 - 1,200,000

                                = 300,000

Margin\ of\ safety\ ratio=\frac{Margin\ of\ safety}{Actual\ sales}

Margin\ of\ safety\ ratio=\frac{300,000}{1,500,000}

                                             = 20%

B.

(1) Contribution margin per marketing plan = Sales - Variable cost

                                                                   =  $4,000 - $2,000

                                                                   = $2,000

Break-even\ in\ rooms=\frac{Fixed\ cost}{contribution\ margin\ per\ marketing\ plan}

Break-even\ in\ rooms=\frac{400,000}{2,000}

Break even in marketing plan = 200

(2) Break-even in dollars:

= Break-even in marketing plan × Average rate per plan

= 200 × 4,000

= 800,000

(3) Margin of safety = Actual sales - Break-even sales in dollars

                                = 1,500,000 - 800,000

                                = 700,000

Margin\ of\ safety\ ratio=\frac{Margin\ of\ safety}{Actual\ sales}

Margin\ of\ safety\ ratio=\frac{700,000}{1,500,000}

                                             = 47%

Therefore, option (a) would achieve the margin of safety ratio more than 45%.

You might be interested in
Which of the following is not one of the four components of the business process
FrozenT [24]
Do you have a list of the components? 
4 0
3 years ago
Consumers in Georgia pay twice as much for avocados as they do for peaches. However, avocados and peaches are equally priced in
Ugo [173]

Answer: Explanation:

The marginal rate of substitution of peaches for avocados is the maximum amount of avocados that a  person is willing to give up to obtain one additional peach. When consumers maximize utility, they set their MRS equal  to the price ratio,  Pp/PA

where ,

P p  is the price of a peach and

PA is the price of an avocado.

In Georgia,  avocados cost twice as much as peaches, so the price ratio is ½ , but in California, the prices are the  same, so the price ratio is 1. Therefore, when consumers are maximizing utility (assuming they buy  positive amounts of both goods), the marginal rates of substitution will not be the same for consumers  in both states. Consumers in California will have an MRS that is twice as large as consumers in Georgia.

4 0
3 years ago
On January 1, 2021, the Excel Delivery Company purchased a delivery van for $111,000. At the end of its five-year service life,
sveta [45]

Answer:

Annual depreciation = $44,400

Explanation:

Given,

Purchase price of the delivery van = $111,000

Salvage value = $11,400

Useful Life = 5 years

We know that

annual depreciation under double declining balance (%) = (100%/useful life)*2

Putting the value in the formula, Annual depreciation (%) =   (100%/5)*2

                                                                                               = 40%

Annual depreciation = Purchase Price*Percentage of annual depreciation

Annual depreciation = $111,000*40% = $44,400

6 0
3 years ago
In a closed​ economy, the values for​ GDP, consumption​ spending, investment​ spending, transfer​ payments, and taxes are as​ fo
Oliga [24]

Answer: Option (C) is correct.

Explanation:

National Savings is divided into two parts, private savings and public savings.

Private Savings = GDP - Taxes + Transfer payments - Consumption Spending

                         = Y - T + TR - C

                         = 12 - 3 + 2 - 9

                          = $ 2 trillion

Public Savings  = Taxes - Government Spending - Transfer payments

                           = 3 - 0 - 2

                           = $1 trillion

∴ Option (C) is correct.  

Private saving = ​$2 trillion and public saving = ​$1 trillion.

3 0
3 years ago
Rowanda could not settle her tax dispute with the IRS at the appeals conference. If she wants to litigate the issue but does not
Ray Of Light [21]

Answer: D) Tax Court

Explanation:

Tax court of United States is court that is made for hearing tax-related issue and problem and then judgment is made on the disputes.According to the question, Rowanda should appeal to U.S. tax court for her tax disputer with IRS so that appropriate decision can be made in legal way.

Other options are incorrect because the United state's court of Appeals, federal claim and district are not the place where tax related disputes are legally handled and heard.Thus, the correct option is option(D).

8 0
3 years ago
Other questions:
  • Which of the following statements is correct?a. In order to calculate the inflation rate for the year 2011, we need to know the
    12·1 answer
  • A $1,000 par bond is currently selling for $1,100. It has a 9% coupon rate, fifteen years remaining to maturity, and pays intere
    11·1 answer
  • Suppose that each firm in a competitive industry has the following costs: Total Cost: TC=50+1/2q^2 Marginal Cost: MC=q where q i
    10·1 answer
  • A cash flow statement can help you develop and determine budget categories.
    13·1 answer
  • Jorge Company had the following transactions during 2017. • Sales of $4,500 on account • Collected $2,000 for services to be per
    8·1 answer
  • The total cost of direct materials, direct labor, and factory overhead transferred from the Work-in-Process Inventory account to
    6·1 answer
  • $ 485,000 $ 432,000 $Enter a dollar amount Enter percentages rounded to 0 decimal places % Inventory $ 786,000 $ 617,000 $Enter
    9·1 answer
  • What are some possible explanations for why these loans are popular despite the fact that they create a cycle of debt for many b
    14·2 answers
  • The Category Profile that involves evaluating the major forces and trends that are impacting an industry: including pricing, com
    12·1 answer
  • How does a company figure out which benefits customers want and need?.
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!