48. 50. Tanner and Angela want to open a custom skateboard shop as a partnership business. They have prepared several cost estimates and are working on a breakeven analysis for their firm. They have gathered the following information: ● ● It is estimated that a skateboard will sell for $125 per unit. Variable expenses per skateboard are estimated to be as follows: a. Each skateboard costs $55 in raw materials. b. It takes 2 hours to make each skateboard: C. Each skateboard maker earns $15 per hour. Fixed expenses of the skateboard business, including facility rental are estimated to be $15,000 per month. Based on this information, please answer the following questions: a. What is the "Contribution Margin" earned on each skateboard that is sold? The contribution margin is 55 b. How many skateboards must be sold each month in order to break even? | C. What is the breakeven dollar amount in “Sales" per month?
48. 50. Tanner and Angela want to open a custom skateboard shop as a partnership business. They have prepared several cost estimates and are working on a breakeven analysis for their firm. They have gathered the following information: ● ● It is estimated that a skateboard will sell for $125 per unit. Variable expenses per skateboard are estimated to be as follows: a. Each skateboard costs $55 in raw materials. b. It takes 2 hours to make each skateboard: C. Each skateboard maker earns $15 per hour. Fixed expenses of the skateboard business, including facility rental are estimated to be $15,000 per month. Based on this information, please answer the following questions: a. What is the "Contribution Margin" earned on each skateboard that is sold? The contribution margin is 55 b. How many skateboards must be sold each month in order to break even? | C. What is the breakeven dollar amount in “Sales" per month?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
I need help. These are the two formulas required to solve the problem about the skateboard shop
Transcribed Image Text:Wholesale & Retail Firms
• Desired profit may be included with
breakeven analysis in dollars.
FC + Desired profit
BE$=
1- VC (as a percentage of the sales dollar)
• VC is a percentage of sales dollars (i.e., "Cost of
Goods Sold" as a percent of "Sales").
Variable Costs are often identified in this way for
wholesale and retail firms that sell a variety of items.
.
Break-Even Analysis
For break-even Quantity:
FC
P-VC
where BEQ =:
FC = Fixed costs
P-Price charged per unit
VC-Variable cost per unit
Contribution margin-P-VC
Transcribed Image Text:48. 50. Tanner and Angela want to open a custom skateboard shop as a partnership business.
They have prepared several cost estimates and are working on a breakeven analysis for their
firm. They have gathered the following information:
●
It is estimated that a skateboard will sell for $125 per unit.
Variable expenses per skateboard are estimated to be as follows:
a.
Each skateboard costs $55 in raw materials.
b. It takes 2 hours to make each skateboard:
c. Each skateboard maker earns $15 per hour.
Fixed expenses of the skateboard business, including facility rental are estimated to be
$15,000 per month.
Based on this information, please answer the following questions:
a. What is the "Contribution Margin" earned on each skateboard that is sold?
The contribution margin is 55
b. How many skateboards must be sold each month in order to break even?
|
C. What is the breakeven dollar amount in "Sales" per month?
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