Dolphin makes swim fins for deep sea divers and recreational swimmers. Like a Dolphin has assets of $3,100,000. Its yearly fixed cost is $710,000 and variable costs amount to $26.00 for each set of fins. Between the two product lines Like a Dolphin sales volume is currently 51,800 pairs of fins. Competitors are selling similar fins at $41.50 a set. Like a Dolphin owners want to earn a 10% return on investment of the companies assets.
Dolphin makes swim fins for deep sea divers and recreational swimmers. Like a Dolphin has assets of $3,100,000. Its yearly fixed cost is $710,000 and variable costs amount to $26.00 for each set of fins. Between the two product lines Like a Dolphin sales volume is currently 51,800 pairs of fins. Competitors are selling similar fins at $41.50 a set. Like a Dolphin owners want to earn a 10% return on investment of the companies assets.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Like a Dolphin makes swim fins for deep sea divers and recreational swimmers. Like a Dolphin has assets of $3,100,000. Its yearly fixed cost is $710,000 and variable costs amount to $26.00 for each set of fins. Between the two product lines Like a Dolphin sales volume is currently 51,800 pairs of fins. Competitors are selling similar fins at $41.50 a set. Like a Dolphin owners want to earn a 10% return on investment of the companies assets.
Determine the full product cost.
Like a Dolphin
With their current costs, will owners be able to achieve their target profit?
Like a Dolphin
Determine the full product cost.
Like a Dolphin
| Revenue at market price | |
|---|---|
| Less: Desired Profit | |
| Target Full Product Cost |
With their current costs, will owners be able to achieve their target profit?
Like a Dolphin
| Current variable costs | |
|---|---|
| Plus: Fixed costs | |
| Current full product cost |
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