2. lle Patrice has just graduated university and is thinking about opening "Surf Shop" to sell surfboards. Basic surfboards are manufactured by a local company and the cost to purchase each surfboard is $350. Patrice plans to paint a scene on each surfboard himself so that each surfboard is unique. The estimated cost for paint and supplies is $50 per unit and the labor cost for painting the scene is zero. Pat estimates that each unique surfboard can sell for $1,000.00. Other costs include rent for the shop of $24,000 annually and advertising of $16,000 annually. Patrice also plans to hire a full- time manager at an annual salary of $80,000. Required: You must show all your calculations in order to get marks. If you provide the answer only you will not receive any marks. 1. What is the contribution margin per unit in $$. What is the contribution margin ratio? re to search cer 5. 3. What is the break -even point in units? What is the break -even point in sales dollars? 4. How many units need to be sold to earn $ 180,000 6. If Surf Shop is operating at 10 units below break-even what is the total loss? 7. If Surf Shop sells 800 surfboards what is the expected profit? to search N 立 0 acer

2. lle Patrice has just graduated university and is thinking about opening "Surf Shop" to sell surfboards. Basic surfboards are manufactured by a local company and the cost to purchase each surfboard is $350. Patrice plans to paint a scene on each surfboard himself so that each surfboard is unique. The estimated cost for paint and supplies is $50 per unit and the labor cost for painting the scene is zero. Pat estimates that each unique surfboard can sell for $1,000.00. Other costs include rent for the shop of $24,000 annually and advertising of $16,000 annually. Patrice also plans to hire a full- time manager at an annual salary of $80,000. Required: You must show all your calculations in order to get marks. If you provide the answer only you will not receive any marks. 1. What is the contribution margin per unit in $$. What is the contribution margin ratio? re to search cer 5. 3. What is the break -even point in units? What is the break -even point in sales dollars? 4. How many units need to be sold to earn $ 180,000 6. If Surf Shop is operating at 10 units below break-even what is the total loss? 7. If Surf Shop sells 800 surfboards what is the expected profit? to search N 立 0 acer

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

2.
lle
Patrice has just graduated university and is thinking about opening "Surf Shop" to sell
surfboards. Basic surfboards are manufactured by a local company and the cost to
purchase each surfboard is $350. Patrice plans to paint a scene on each surfboard himself
so that each surfboard is unique. The estimated cost for paint and supplies is $50 per unit
and the labor cost for painting the scene is zero.
Pat estimates that each unique surfboard can sell for $1,000.00. Other costs include rent
for the shop of $24,000 annually and advertising of $16,000 annually. Patrice also plans to
hire a full- time manager at an annual salary of $80,000.
Required:
You must show all your calculations in order to get marks. If you provide the answer
only you will not receive any marks.
1. What is the contribution margin per unit in $$.
What is the contribution margin ratio?
re to search
cer

5.
3.
What is the break -even point in units?
What is the break -even point in sales dollars?
4.
How many units need to be sold to earn $ 180,000
6.
If Surf Shop is operating at 10 units below break-even what is the total loss?
7. If Surf Shop sells 800 surfboards what is the expected profit?
to search
N 立 0
acer

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