On January 1, 2020, Sheffield Corp. issued ten-year bonds with a face amount of $4500000 and a stated interest rate of 8% payabl
1 answer:
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Answer: $6,891
Explanation: This question requires that the principle amount be calculated. This is the current value of the lump sum saving on the first day, before interest has been compounded. In essence this is the original savings value. To calculate this value, the compound interest formula can be used. However this formula needs to be manipulated so that the principal value, P, is determined:
P =
Where:
P = Principal value: the original value of the saving on the first day, before interest has been taken into account.
A = Amount: The amount at the end of a specific period.
i = Rate of return: the profit, expressed as a an interest rate, that the savings earns periodically.
n = The amount of time that the savings is invested for.
When this formula is applied then the following answer is computed:
P =
= $6 890,887434
Rounded off to $6,891
Answer:
a. Average selling price per unit = $30
b. Average variable cost = $16
c. Average Contribution margin per ticket = $14
d. Break Even Point = 46,600 Tickets
e. For profit of $306,600 = 68,500 tickets
Explanation:
As for the provided information we have,
a. Average selling price per unit =
Provided total sales revenue = $1,980,000
Number of units = $66,000
Thus, average selling price = = $30 per unit.
b. Average variable cost =
Provided total variable cost = $1,056,000
Number of units = $66,000
Thus, average variable cost per unit = = $16 per unit
c. Average Contribution margin per ticket = Average selling price per ticket - Average variable cost per ticket = $30 - $16 = $14 per unit.
Alternatively it can be calculated as =
d. Break Even Point =
Fixed cost = $652,400
Contribution per unit = $14 per unit
Break even point = = 46,600 Tickets
e. In this case desired profit = $306,600
Fixed cost = $652,400
Total amount to be recovered through contribution = $306,600 + $652,400 = $959,000
Thus, number of tickets to be sold =
That is 68,500 tickets.