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Burka [1]
3 years ago
13

Assume that sales are predicted to be $4,000, the expected contribution margin is $1,720, and a net loss of $280 is anticipated.

The break-even point in sales dollars is:
a. $2,000.
b. $2,560.
c. $4,280 .
d. $2,000.
e. $4,651.
Business
1 answer:
Alexeev081 [22]3 years ago
3 0

Answer:

e)  $4,651

Explanation:

The break-even point is the level of activity that a company must operate to have its total cost equal to its total revenue. At this level of activity, the business makes a zero profit, as the total contribution is exactly the same as the total fixed cost.

It is important for the business to have an idea of the number of customers or units of product to sell inorder for it to cover its total fixed cost. This is the information the break-point analysis seeks to provide.

Working it out

Break-point in sales = Total General fixed cost/ Contribution margin ratio

Contribution margin ratio (CMR): Contribution is sales less variable costs. And the contribution margin ratio is the proportion of sales that is earned as contribution. The higher the better.

CMR = contribution/sales

Fixed cost = Contribution + net loss

We can now apply all these relationships to the question given:

Fixed cost = 1720 + 280

                 = 4,000

Contribution margin ratio = 1720/400 = 43%

Break-even sales ($) = 4000/0.43

                                        = $4,651

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Adamdata, a cell phone brand, is planning to collaborate with a few companies that create software for cell phones. It wants to
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Answer:

B) options-based planning

Explanation:

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3 years ago
If the firm’s beta is 1.6, the risk-free rate is 9%, and the average return on the market is 13%, what will be the firm’s cost o
Luden [163]

Answer:

CAPM= RF+B(RM-RF)

= 9+1.6(13-9)

=15.4%

13=RS+1.6*(4)

13=RS+6.4

RS=13-6.4

RS=6.6%

Explanation:

3 0
3 years ago
Horten Sporting Goods Corporation makes two types of racquets, tennis and badminton. The company uses the same facility to make
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Answer:

Horten Sporting Goods Corporation

                                    TR                BR

a. Cost per unit         $66.98        $62.08

b. Price of Badminton Racquets = $80.70

Explanation:

a) Data and Calculations:

                                   Tennis              Badminton

                                Racquets              Racquets

Units produced          70,000                 30,000

Direct costs:

Direct materials      $17.10 per unit      $14.80 per unit

Direct labor             33.50 per unit        23.10 per unit

Category       Estimated   Cost Driver                         Amount of Cost Driver

                          Cost                                                      TR         BR      Total

Unit level       $736,000 Number of inspection hrs   15,900  7,100  23,000

Batch level      353,800  Number of setups                     83       39        122

Product level   152,500  Number of TV commercials       4          1            5

Facility level   630,000   Number of machine hrs  30,600 39,400 70,000

Total           $1,872,300

Overhead Rates:

Inspection  = $32 ($736,000/23,000) per inspection hour

Equipment setup = $2,900 (353,800/122) per equipment setup

TV commercials = $30,500 ($152,500/5) per commercial

Depreciation = $9 ($630,000/70,000) per machine hour

Overhead Allocation:

                                                        TR                  BR                    Total

Inspection  = $32                     $508,800       $227,200       $736,000

                               ($32*15,900)           ($32*7,100)

Equipment setup = $2,900       240,700            113,100         353,800

                                ($2,900*83)            ($2,900*39)

TV commercials = $30,500      122,000            30,500          152,500

                               ($30,500 *4)            ($30,500 *1)

Depreciation = $9                    275,400          354,600         630,000

                              ($9 * 30,600)            ($9 * 39,400)    

Total allocated expenses   $1,146,900        $725,400     $1,872,300

Units produced                        70,000           30,000

Overhead cost per unit         $16.384           $24.18

Cost per unit:

                                    TR                BR

Direct materials        $17.10         $14.80

Direct labor               33.50           23.10

Overhead cost          16.38            24.18

Total cost per unit $66.98        $62.08

Cost of Badminton = $62.08

30% markup =              18.62

Price =                        $80.70

7 0
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lilavasa [31]

Answer:

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  5. interest payments on a commercial mortgage are tax-deductible
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  8. you have control over what alterations you want to make to your office space

Disadvantages of buying business premises

The disadvantages of buying business premises include the following:

  1. Unlike renting, you'll need to come up with a substantial mortgage deposit - this is money that might be used for more important business purposes.
  2. If you own premises, you may find it harder to relocate your business, because selling business premises is a complex and sometimes lengthy process. If you rent, you may be able to negotiate to end your rental agreement, or to find another organisation to take over your tenancy at short-notice.
  3. If you have a variable rate mortgage, you are exposed to increases in interest rates.
  4. Owning a property means you'll be responsible for factors such as maintenance, fixtures and fittings, insurance, decoration and security, which can prove expensive.
  5. Repaying a commercial mortgage
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  7. Book traversal links for Advantages and disadvantages of buying business premises

Explanation:

4 0
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