1. What would be the BEP in units sales if the company decides to: Increase the sales price from $100 to $105 by spending annually $5000 for advertisement? 2. What would be the BEP in units sales if the company decides to: Increase the sales price from $100 to $105 and cutting the fixed salary of the salespeople by $15000 and instead provides them $10 per unit commission? 3. Which one of the following options provides better units BEP for the company? Option A: Increase the sales price from $100 to $105 by spending annually $5000 for advertisement OptionB: Increase the sales price from $100 to $105 and cutting the fixed salary of the salespeople by $15000 and instead provides them $10 per unit commission. a) option A b) option B c) both options are same d) None of the options
1. What would be the BEP in units sales if the company decides to: Increase the sales price from $100 to $105 by spending annually $5000 for advertisement? 2. What would be the BEP in units sales if the company decides to: Increase the sales price from $100 to $105 and cutting the fixed salary of the salespeople by $15000 and instead provides them $10 per unit commission? 3. Which one of the following options provides better units BEP for the company? Option A: Increase the sales price from $100 to $105 by spending annually $5000 for advertisement OptionB: Increase the sales price from $100 to $105 and cutting the fixed salary of the salespeople by $15000 and instead provides them $10 per unit commission. a) option A b) option B c) both options are same d) None of the options
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
1. What would be the BEP in units sales if the company decides to:
Increase the sales price from $100 to $105 by spending annually $5000 for advertisement?
2. What would be the BEP in units sales if the company decides to:
Increase the sales price from $100 to $105 and cutting the fixed salary of the salespeople by $15000 and instead provides them $10 per unit commission?
3. Which one of the following options provides better units BEP for the company?
Option A:
Increase the sales price from $100 to $105 by spending annually $5000 for advertisement
OptionB:
Increase the sales price from $100 to $105 and cutting the fixed salary of the salespeople by $15000 and instead provides them $10 per unit commission.
a) option A
b) option B
c) both options are same
d) None of the options
Transcribed Image Text:Use the available pick lists from within the three boxed areas to change values,
noting how the break-even units change within the green-shaded area. Think
critically about why the changes in break-even units are occuring based on your
revised assumptions.
Sales price per unit
Variable costs per unit
Total fixed cost
Break-even in units
BEFORE
100
80
50,000
2,500
AFTER
100
80
50,000
2,500
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education