Grove Audio is considering the Introduction of a new model of wireless speakers with the following price and cost characteristics.$430.00 per unit190.00 per unit624,000 per yearSales priceVariable costsFixed costsRequired:a. What number must Grove Audio sell annually to break even?b. What number must Grove Audio sell to make an operating profit of $180,000 for the year?a. Break-even sales in unitsb. Number of units to be sold

Break even point :— It is the point of production where total cost is equal to total revenue. At…

Answered: Grove Audio is considering the…

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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What is the OCF?
A cafe currently offers a cup of cafe latte for P100. The variable costs are P58 per cup, and 10,000 cups are sold annually and a profit of P200,030 is realized per year. A new design in making the coffee will increase the variable costs by 20% and Fixed Costs by 10% but sales will increase to 12,493 cups per year. If we employ the new design, at what selling price do we break even?
1. ABC Taxi has an average fixed cost of $8,000 a year for each car. Each mile driven has variable cost $.40 and collect fares of $.60. How many miles a year does each car have to travel before making profit? a. ABC company is contemplating adding a new line of product, which will require leasing new equipment for a monthly payment of $12,000. Variable costs would be $15.00 per product, and selling price per product is $40. What would be profit or loss if business sell 600 of these products? b. If 800 quantity of products can be sold, and a profit target is $10,000, what price should be charged for each product?
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Shue Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $24,100, and the company expects to sell 1,580 per year. The company currently sells 1,930 units of its existing model per year. If the new model is introduced, sales of the existing model will fall to 1,600 units per year. The old board retails for $22,500. Variable costs are 53 percent of sales, depreciation on the equipment to produce the new board will be $1,395,000 per year, and fixed costs are $3,100,000 per year. If the tax rate is 23 percent, what is the annual OCF for the project? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. OCF
A company produces a special new type of TV. The company has fixed costs of $476,000, and it costs $1100 to produce each TV. The company projects that if it charges a price of $2600 for the TV, it will be able to sell 800 TVs. If the company wants to sell 850 TVs, however, it must lower the price to $2300. Assume a linear demand What is the maximum profit that can be reached? It is $ (Round answer to nearest cent).
A small coffee shop currently offers a cup of cafe latte for P106. The variable costs are P58 per cup, and 10,113 cups are sold annually and a profit of P200,617 is realized per year. A new design in making the coffee will increase the variable costs by 10% and Fixed Costs by 20% but sales will increase to 12,043 cups per year. If we employ the new design, at what selling price do we break even?
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Baghiben
A small coffee shop currently offers a cup of cafe latte for P109. The variable costs are P60 per cup, and 10,386 cups are sold annually and a profit of P200,758 is realized per year. A new design in making the coffee will increase the variable costs by 10% and Fixed Costs by 20% but sales will increase to 12,231 cups per year. If we employ the new design, at what selling price do we break even?

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