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rjkz [21]
3 years ago
5

Miracle Clean's variable costs are $3.00 per bottle and Fixed Expenses are $350,000 per year. The company currently sells 150,00

0 bottles for $6.50 which results in profit of $175,000. The company is considering raising the selling price to $7.00 per bottle which is expected to decrease sales by 20%. If the price is raised, the number of units that must be sold to keep the profits unchanged is
Business
1 answer:
DerKrebs [107]3 years ago
7 0

Answer:

131,250= number of units

Explanation:

Giving the following information:

<u>We need to calculate the number of units to be sold to maintain a profit of $175,000.</u>

Unitary variable cost= $3

Fixed expenses= $350,000

Selling price= $7

Net income= total contribution margin - fixed cost

175,000= number of units*(7 - 3) - 350,000

525,000 = number of units*4

525,000 / 4= number of units

131,250= number of units

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1 year ago
Social Security Multiple Choice Is a Defined Benefit Pension Plan Is offered by local governments Is an optional Pension Plan Is
worty [1.4K]

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4 0
2 years ago
Compute the selling price if variable costs are ​$16 per unit. Determine the formula used to calculate the selling price.
dezoksy [38]

Answer: $40

Explanation:

Selling price can be calculated through the contribution margin equation;

Contribution margin = (Selling Price - Variable cost) / Selling Price

Contribution margin = Fixed costs/break-even point

= 660,000/1,100,000

= 60%

60% = (Selling Price - 16) / Selling Price

Selling price * 60% = Selling price - 16

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2 years ago
A stock has an expected return of 13.5 percent, its beta is 1.40, and the expected return on the market is 11.5 percent. What mu
uranmaximum [27]

Answer:

The risk free rate is 6.50%

Explanation:

The required rate of return is the minimum return that investors demand/expect on a stock based on the systematic risk of the stock as given by the beta. The expected or required rate of return on a stock can be calculated using the CAPM equation.

The equation is,

r = rRF + Beta * (rM - rRF)

Where,

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As we know the figures for r, Beta and rM, we will input these figures in the equation to calculate risk free rate.

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2 years ago
The following is a partially completed lower section of a departmental expense allocation spreadsheet for Brickland. It reports
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Answer:

a. $6,400.

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= $32000 X 4/20 = $6,400

3 0
3 years ago
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