Module 2 Quantitative Assignment (MO 2.1-2.3, CO 1, 2)

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Calhoun Community College *

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Apr 3, 2024

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1 Type Full Name in row 3 below: PROBLEM 1 (3 pts) a. How many units do we have to sell at each price to “breakeven?” $40 breakeven point = 200,000 4,000,000/ (40-20)=200,000 $45 breakeven point = 160,000. 4.000,000/(45-20) = 160,000 $50 breakeven point = 133,334 4,000,000/ (50-20)= 133333.33 Price Demand $40 250,000 $45 180,000 $50 150,000 Revenue $40 = 250,000*40 = 10000000 Revenue $45= 180000* 45 = 8100000 Revenue $50= 150,0000*50 = 7100000 c. Does revenue increase with price over this range of prices? No, as the price for revenue increases, there is a drop in demand and revenue. PROBLEM 2 (3 pts) a. How many meals does George need to sell in a year to breakeven? Contribution margin per meal = $15 - $6 = $9 per meal yearly fixed cost = $20000*12 = $240,000 Breakeven meals = $240000/ $9 = 26,667 b. How many meals does George need to sell in a year to earn a $100,000 net margin? $240000+ $100000) / $9 = 37,778 meals Respond to all ten (10) problems below. Be sure to scroll down and answer every question. Our firm has annual fixed costs of $4 million. We sell a product that costs us $20 to purchase and distribute (total Unit Variable Costs). We want to sell this product for $40, $45 or $50. b. How much revenue would your firm generate at prices of $40, $45 and $50 if the following levels of demand were experienced? George plans to open a restaurant in Birmingham. The menu calls for the average customer to spend $15 on each meal. Total fixed costs are $20,000 per month. The total variable costs per meal are expected to average $6.

2 240000/ 7.5 = 32,000 meals PROBLEM 3 (4 pts) a. How much Sales Revenue and Gross Margin did Courtney generate from Abbacus last year? Sales revenue = 300 *10,000= 3,000,000 Gross margin= 40% * 3,000,000 = 1200000 Sales revenue= (1-5%)*300*10000=$2850000 difference= 3000000 -2850000=$150000 Gross margin = 40% *2850000=$1140000 difference= 1200000- 1140000 =$60000 (i) Abbacus at $285 (95% of $300), or (ii) other customers at list price of $300 150000/(285*40%)=1315.78 cases 150000/(300*40%)=1250 cases PROBLEM 4 (4 pts) c. How many meals does George need to sell in a year to earn a net margin equal to 10% of sales revenue? Courtney is a manufacturer’s representative for an industry leading supplier of technology products. She has determined that last year her largest customer, Abbacus, purchased 10,000 cases of product from her at a price of $300 per case. The gross margin on those sales was 40%. Abbacus has pressed Courtney hard for a 5% discount (reduction in selling price) throughout the next year. Courtney has spoken with her manager and learned that she will be expected to generate 5% more in gross margin next year than she did last year. b. If Courtney grants a 5% discount off of the $300 list price per case to Abbacus, how much sales revenue and gross margin will be generated if she sells the same number of cases to Abbacus (10,000) as she did last year? Report the difference in revenue and margin that Courtney will lose at the lower price if the discount is granted and unit sales remain the same at 10,000 cases. c. If Courtney grants the price discount request, how many additional cases of product would she need to sell to: to make up the lost $150 K Gross Margin earned from Abbacus next year caused by the 5% discount? A leading competitor in the electronics industry has been operating successfully. The firm has enjoyed industry leading sales, gross margin and profits along with high levels of customer satisfaction and loyalty.

3 40% of $400= 160 160 * N= 2,000000 N= 12500 Total Sales Revenue $400,000,000 Contribution Margin $160,000,000 Net Margin $40,000,000 442-40 million =2 million Increase in marketing expenditure= $2 million 2 million + 2million = 4 million $4 million / 0.4 = 10 million, additional sales revenue required =$10 million PROBLEM 5 (2 pts) a. What is your return on assets? 1,000,000/ 25,000,000 *100 = 4.00% b. What is your asset turnover? 2.00 times PROBLEM 6 (2 pts) a. $6,000,000 in liabilities. 400000 / 10000000-6000000= 10.00% The firm’s marketing expenditures last year totaled $20 million. The average product sold for $400 per unit. The Vice President proposes to increase the firm’s marketing budget for the next fiscal year by 10%. This firm’s Contribution Margin has been running at 40% of sales and would be expected to remain at that level. No change in price is anticipated. a. How many additional units of this product would have to be sold to “recover” or break-even on the added $2 million in added marketing spending? b. To convince the firm’s CEO that the additional investment in marketing should be made, the VP wants to explain that the added investment would generate additional sales and profits for the firm. The following information has been estimated for the next year with a marketing budget of $20 million. How much more in sales revenue (above $400 Million) would need to be generated by the added marketing expenditures of $2 Million to boost the firm’s net margin from the projected $40 million to $42 million – a 5% increase in profitability. Your company earns $1,000,000 net margin on $50,000,000 revenue with $25,000,000 in assets. Your company earned $400,000 net margin with $10,000,000 in assets. Find your return on net worth if your assets are financed by:

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4 b. $8,000,000 in liabilities. 400000 / 10000000- 8000000= 20.00% PROBLEM 7 (2 pts) a. Total variable costs are: 12000000 +200000 = $12200000 b. Total fixed costs are: 400000+2000000+50000=2450000 You incur the following expenses in a year: Warehousing ($400,000); Salaries ($2,000,000); Cost of goods sold ($12,000,000); Interest expense ($50,000); Sales commission ($200,000).

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Related Questions

O Homework i 5 Raju is in a competitive product market. The expected selling price is $80 per unit, and Raju's target profit is 10% of selling price. Using the target cost method, what is the highest Raju's cost per unit can be? (Round your answer to 2 decimal places.) Target cost :: F1 @ 2 W 30 F2 # 3 E S D 80 F3 MAR 29 $ 4 R a F4 % 5 U N 8 DII FB DD F9 H J K O A 4 F10 L

Solve this now

Question 2: Nizwa Company has the following information given in OMR. OMR Fixed Cost 14750 Break even Sales 20000 You are required to calculate the values below; a) PV Ratio b) Profit when sales are 25000 c) New BE point if selling price is reduced by %20

please explain the four matching

Please help me with 3 and 5d. Thank you! :)

Question 2

Q6 please help me

X The figure below shows graphs of the fixed cost function, total cost function and the total revenue function for a certain commodity. 20 8000+ 7000 6000 5000 4000 Dollars ($) 3000- 2000 1000 -10 -1000+ 10 20 30 (a) What is the break-even point? (295,7650) (b) What are the fixed costs? $ Percent of capacity= 40 Units Next Question 50 TR If the selling price per unit is $90, and the variable cost per unit is $20: TC FC 60 70 80 90 100 (c) If the maximum production capacity of the commodity is 110, express the break- even units as a percent of capacity? enter the answer in the form (x,y) e.g. % (round to two decimal places if necessary)

If the selling price per unit is $75, the variable expense per unit is $70, and total fixed expenses are $62,500 what will the breakeven sales in units be? Question 11 options: 431 893 833 12,500

Please help me with 4(a). Thanks! :)

Market for flat-screen TVs: Demand: Qd= 2,600 - 5P Supply: Q=-1,000 + 10P What would be the quantity demanded if a price floor is set at $100? 240 0 700 2,100 1,400

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