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Finance and Accounting Questions

March 24, 2016 | Author: | Posted in accounting, mathematics and economics

“Appendix A Computations “11 . The C-V-P Equation “The company sells lawnmowers for 895 each . The variable cost per lawnmower is 520 . The company ‘s monthly fixed costs are 84 ,500 . Using “the C-V-P equation , compute the amount of profit the company will have for a month in which the company sells 375 lawnmowers “Sales “895 “375 “335625 “Variable cost “520 “375 “195000 “constritbution Margin “140625 “Fixed Cost “84500 “Net profit “56125 “12 . Break-Even Units “The company sells shovels for 27 .75 each . The variable cost per shovel is 14 .25 . The company ‘s monthly fixed costs are 2 ,538 . Compute [banner_entry_middle]

the “number of shovels the company must sell to break even “Fixed Cost “2538 “Constribution margin per unit “27 .75- 14 .25 “BE in units “188 “13 . Break-Even Sales Revenue “The company has a variable cost ratio of 65 and monthly fixed costs of 91 ,000 . What is the company ‘s break-even point in terms of sales dollars “Fixed cost “——————— “91000 “1-65 “CMR “BE in dollars “260000 “14 . C-V-P Analysis “The Last Outpost is a tourist stop in a western resort community . Kerry Yost , the owner of the shop , sells hand-woven blankets for an average “price of 30 per blanket . Kerry buys the blankets from weavers at an average cost of 21 . In addition , he has selling expenses of 3 per blanket “Kerry rents the building for 300 per month and pays one employee a fixed salary of 500 per month “1 . Determine the number of blankets Kerry must sell to break even “Fixed Cost 300 500 “800 “total “Variable cost 21 3 “24 “per unit “break even in dollars 800 (30-24 “134 units “2 . Determine the number of blankets Kerry must sell to generate a profit of 1 ,000 per month “Sales (300×30 “9000 “Variabale cost (300x 24 “7200 “Contribution Margin “1800 “Fixed Cost “800 “Net Profit “1000 “Sales in units “300 “units “3 . Assume that Kerry can produce and sell his own blankets at a total variable cost of 16 per blanket , but that he would need to hire one additional employee at a monthly salary of 600 ” a . Determine the number of blankets Kerry must sell to break even “month “Fixed Cost , add 600 “1400 “total “Variable cost (16 3 “19 “per unit “break even in dollars 1400 (30-19 “128 units ” b . Determine the number of blankets Kerry must sell to generate a profit of 1 ,000 per “Sales (219×30 “6570 “Variabale cost (219x 19 “4161 “Contribution Margin “2400 “Fixed Cost “1400 “Net Profit “1000 “Sales in units 2400 /11 “219 units amount rounded off… [banner_entry_footer]

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