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Sladkaya [172]
3 years ago
12

An electronics company has developed a new hand-held device. The company predicts that the start-up cost to manufacture the new

product will be $125,000, and the cost to make one device will be $6.50. A. If the company plans on selling the device at a wholesale price of $9, write and solve an inequality to determine how many must be sold for the company to make a profit. Show your work. B. The cost of making one device is 10% more than the company predicted. What is the new cost of making one device? How many devices must it now sell at the same wholesale price to make a profit? C. Suppose the company wants to start making a profit after selling the same number of devices you found in part A. What should the new wholesale price be? Explain how you found this price.
Business
1 answer:
Leni [432]3 years ago
3 0

Answer:

A) to calculate the break even point we can use the following:

break even point = fixed costs / contribution margin

break even point = 125,000 / (9 - 6.5) = 125,000 / 2.5 = 50,000 units

The company must sell over 50,000 units to make a profit

B) if the unit production costs increase 10%, the new unit cost will be $7.15, and the new break even point will be: 125,000 / (9 - 7.15) = 125,000 / 1.85 = 67,567.6 which we round up to 67,568 units.

Now the company must sell at least 67,568 units to make a profit

C) If the company wants to increase its product price to a level where the break even point is 50,000 units, then the new price should be $9.65.

The contribution margin must be $2.5, so if the production costs are $7.15, we just add $2.5 to get $9.65 per unit.

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Erin has been analyzing the manufacturing process for a local company and is starting to see some changes because of her suggest
galben [10]

Answer: six sigma; eliminate waste.

Explanation:

Here's the remainder of the question:

This scenario is an example of [budget review, Six Sigma, Total quality managment], a principle that is most likely being implemented to[eliminate waste,foster teamwork,exceed customer expectations].

The scenario discussed in the question is an example of six sigma. Six Sigma refers to a data driven method that is used in detecting defects and eliminating wastes. It helps organizations improve their business processes capability which is vital in the improvement of performance and the reduction in defects.

Six sigma also beings about improvement in the morales of the workers, and the improvement in profits.

7 0
3 years ago
The market value of​ Fords' equity, preferred​ stock, and debt are $ 7 ​billion, $ 2 ​billion, and $ 15 ​billion, respectively.
Stolb23 [73]

Answer:

Ford's weighted average cost of capital is 8.22 %

Explanation:

Weighted Average Cost of Capital (WACC) is the minimum return that the company expect from a project. It shows the risk of the company.

Calculation of WACC

WACC = Cost of equity + Cost of preferred​ stock + Cost of debt

Capital Source       Market Values     Weight      Cost      Total Cost

equity                         $ 7 ​billion          29.17%      13.6%       3.97 %

preferred​ stock         $ 2 ​billion            8.33%      12%          1.00 %

debt                           $ 15 ​billion         62.50%     5.2 %       3.25%

Total                          $ 24 billion                                          8.22 %

Cost of equity = Risk free rate + Beta × Risk Premium

                       =  4% + 1.2 × 8%

                       =  13.6%

Cost of preferred​ stock = Dividend/Market Price

                                       = $ 3/ $ 25 × 100

                                       = 12%

Cost of debt = interest × (1- tax rate)

                    = 8% × (1-0.35)

                    = 5.2 %

7 0
3 years ago
How might the inability to provide fringe benefits affect a sole proprietors ability to run a business
Reika [66]
The inability of sole proprietors to provide fringe benefits to their employees can affect the service rendered to customers. Without fringe benefits, the employer will not be able to attract quality applicants for his business. He may have to settle for less qualified staff who may not be able to provide clients with excellent service.
4 0
3 years ago
Klein Cosmetics has a profit margin of 5.0%, a total assets turnover ratio of 1.5 times, a zero debt ratio and therefore an equi
arsen [322]

It is true that this change would probably be a good move, as it would increase the ROE from 7.5% to 13.5%.

<u>Explanation:</u>

Equity multiplier is calculated by dividing the total assets of a company to shareholder’s equity of an organization. If a company has not raised any debt, then such company would be having equity multiplier equal to 1. t is a leverage ratio.

Return on equity is another financial measure to calculate the return. It is calculated by dividing the net income of a company to the shareholder’s equity. It directly shows the amount that a company is earning on its money invested by the equity shareholders.

3 0
3 years ago
EA14.
cricket20 [7]

Answer:

$1.86; $3.5

Explanation:

Total cost incurred:

= Cost received from departments + Addition of cost within its departments

= $10,000 + $27,200

= $37,200

Unit cost for materials:

= Total cost incurred ÷ equivalent units

= $37,200 ÷ 20,000

= $1.86

Total cost incurred:

= Cost received from departments + Addition of cost within its departments

= $10,000 + $53,000

= $63,000

Unit cost for Conversion:

= Total cost incurred ÷ equivalent units

= $63,000 ÷ 18,000

= $3.5

3 0
3 years ago
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