Exercises and Problems Cvp

QUESTION 5: Kai decides to keep his price the same and add color, increasing variable costs by $0.40 per issue. What is the percent increase in unit volume (copies per issue) required to maintain $500 profits and cover the increased fixed and variable

Scenario: Richman Investments provides high-end smartphones to several employees. The value of each smartphone is $500, and approximately 1,000 employees have these company-owned devices. In the past year, employees have lost or damaged 75 smartphones .

New Contribution Margin = New Price per unit – Variable cost per unit =$8.5-$2.5 =$6

Breakeven Analysis for Product Tylenol Approach 1 - Same price as Tylenol Approach 2a - Cheaper than Tylenol Approach 2b - Cheaper w/lowered trade cost $ $ $ $ Unit Cost (Variable Cost) 0.60 0.60 0.60 0.60 Trade Cost (Selling Price to Retailers) $ 1.69 $ 1.69 $ 1.05 $ 0.70 Fixed Cost (Advertising) 2,000,000 6,000,000 6,000,000 6,000,000 Break-Even Quantity [Fixed Cost/(Trade Cost-Unit Cost)] 1,834,862 5,504,587 13,333,333 60,000,000 Contribution Margin (Unit) 64% 64% 43% 14%

Question 1: Using budget data, how many motors would have to be sold for Waltham Motors Division to breakeven?

13. If the selling price is $22 per unit, what is the contribution margin per unit sold?

Consolidated Company makes cardboard boxes. During the most recent accounting period Consolidated paid $60,000 for raw materials, $48,000 for labor, and $52,000 for overhead costs that were incurred to make boxes. Consolidated started and completed 400,000 boxes. Consolidated desires to earn a gross margin that is equal to 40% of product cost. Based on this information the selling price per box is:

Assume that next year management wants the company to earn a minimum profit of $162,000. How many units be sold to meet this target profit figure? [3 points]

In our second assumption, instead of using the cost of goods per cases in 1986, we try to use the percentage it counts in the total expenses which is 50.4% and to find the sales needed to break-even. The detail of the calculation is shown in the answer for questions d. The result is that 95,635, a little bit higher than the estimated sales of 90,000.

1. The local Mastermind store sells innovative educational toys. Part of their service is giving advice to customers about the best toys for a particular age group, which requires having more customer service representatives in the store. During the month long Christmas buying season, it makes half of its $500,000 yearly sales. Its contribution margin on average is 40% and its fixed costs for the year are about $150,000. The owner believes that she could make even higher sales, if she had more customer service representatives on the floor during the peak season. She plans on hiring four more people for 200 hours each at $20 per hour. How much additional revenue does she have earn to the nearest dollar

Unit Break-even Volume = Total Fixed Costs/Contribution per unit = $525,000 - $6.40 = 82,031.25units

3. If the load factor could be increased to 75 percent, how many passenger train cars must be operated to earn pre-tax income of $

If Marlene Herbert were to discontinue place mats, he would miss $270,000 that will go toward Mendel paper company fixed cost. The company currently has a plant overhead that is estimated at $420,000 for the quarter. In addition to the fixed plant overhead, the plant incurs fixed selling and administrative expenses per quarter of $118,000. This draws the company to a total fixed cost of $538,000. If Marlene Herbert were to discontinue the second highest contributor to the fixed cost, he would need to increase the volume of computer paper and lower material cost to help pull the contribution margin of the lowest product up to help support the lost of a whole product line.

The revenue is $600,600*1.2= $720,720. The variable cost changes as sales increases and fixed cost stays the same, the gross profit is $175,500. After tax, the net income is $100,557.

The company should not use ZnCl2 to increase battery life. When given the reactants Zinc metal and HCl the balanced equation 1Zn + 2HCl → H2 + 1ZnCl2 was created with a single replacement reaction. Using this equation it was clear that ZnCl2 was the most useful product in comparison to H2, because H2 is a gas which should not be used when making a battery. Using the balanced equation and conversion factors I was able to find the amount of Zinc in 48.3g of product needed per battery. Taking 23.20g of Zinc, the amount of Zinc needed in 48.3g of product and using a conversion factor, I was able to determine that Zinc would cost $0.06 per every battery. Because the company does not want to spend more than $0.05 on Zinc per battery and the new