Given answer general accounting Flyer Company sells a product in a competitive marketplace.Market analysis indicates that its product would probably sellat $48 per unit. Flyer management desires a 12.5% profitmargin on sales. Their current full cost for the product is $44per unit. In order to meet the new target cost, how much willthe company have to cut costs per unit, if any?a. $1b. $2c. $3d. $0

Target cost per unit = Selling price per unit * (1 - Desired profit margin)= $48 * (1 - 0.125) = $48…

Answered: Flyer Company sells a product in a…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 7EB: Delta Co. sells a product for $150 per unit. The variable cost per unit is $90 and fixed costs are...

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Marchete Company produces a single product. They have recently received the results of a market survey that indicates that they can increase the retail price of their product by 8% without losing customers or market share. All other costs will remain unchanged. Their most recent CVP analysis is shown. If they enact the 8% price increase, what will be their new break-even point in units and dollars?
Baghdad Company produces a single product. They have recently received the result of a market survey that indicates that they can increase the retail price of their product by 10% without losing customers or market share. All other costs will remain unchanged. If they enact the 10% price increase, what will be their new break-even point in units and dollars? Their most recent CVP analysis is:
Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
1. Bramble corp. plans to…
Use the information provided below to answer the following questions independently: 3.2.1 If Kempster Limited decides on a profit objective of R400 000, calculate the target sales volume. 3.2.2 Calculate the total Marginal Income and Profit/Loss if the company decides to reduce the selling price to R28 per unit. INFORMATION Kempster Limited expects to incur the following costs to produce and sell 20 000 units of its product at R30 each: Variable manufacturing cost R14 per unit Fixed manufacturing cost R100 000 Variable marketing cost 20% of sales Fixed marketing and administrative cost R40 000
REQUIRED Use the information provided below to answer the following questions independently: 3.2.1 If Kempster Limited decides on a profit objective of R400 000, calculate the target sales volume. 3.2.2 Calculate the total Marginal Income and Profit/Loss if the company decides to reduce the selling price to R28 per unit. INFORMATION Kempster Limited expects to incur the following costs to produce and sell 20 000 units of its product at R 30 each: Variable manufacturing cost R14 per unit Fixed manufacturing cost R100 000 Variable marketing cost 20% of sales Fixed marketing and administrative cost R40 000
A company would like to determine various costs and points to aid them in deciding whether to expand or not. If you are given the following information, compute the required amounts and / or figures.Selling price / unit = P100 Variable cost / unit = P70Annual fixed cost = P500,000 Compute 5. Sales in units to earn a profit of 10% of sales.
Solve the following independent cases and label your supporting computations properly. A) The company's projected profit for the coming year is as follows: Total P 200,000' 120,000 80,000 64,000 16,000 Per Unit P 20 Sales Less: Variable Costs 12 P 8 Contribution Margin P Less: Fixed Costs Net Income 1. Compute the additional profit that the company would earn if sales were P25,000 more than expected. B) KTA sells a special type of health food at a price of P16 per pound. Last year, it purchases this food from its supplier at a cost of P12 per pound. The supplier informed KTA that its cost increases and that this product will now be priced at P14 a pound. Over the years, KTA established a steady market and intends to pass the cost increase along to its customers and also add a P1 per unit to the price for additional profit. Fixed cost for the year are not expected to change and will remain at P34,000. Income tax rate is 32%. The net income after tax last year was P24,000. 2. If KTA can…
PROBLEM SOLVING: (show step by step solution) Break-even and target profits. Analysis of the operations of FAST Company shows the fixed costs to be P200,000 and the variable costs to be P8 per unit. Selling price is P16 per unit. Derive the break-even point expressed in units. How many units must the firm sell to earn a profit of P280,000? What would profits be if revenue from sales were P2,000,000?
Please help with multiple choice questions.
Consider the following information for a given business. Sale revenue =GHS40,000 VC per unit =GHS20 Activity level =1,000 to break even Required: 1. Determine the TFC 2. Express the contribution as a percentage of sale. 3. The company plans to sale 1,500 unit in the next period. What will be the percentage margin of safety (MoS) 4. What margin should the business employ for planning purposes? 5. What total profit should the business expect in order to achieve it's planned sales?
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

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