Maria Lorenzi owns an ice cream stand that she operates during the summer months in West Yellowstone, Montana. She is unsure o price her ice cream cones and has experimented with two prices in successive weeks during the busy August season. The num of people who entered the store was roughly the same each week. During the first week, she priced the cones at $5.80 and 2,460 cones were sold. During the second week, she priced the cones at $6.30 and 2,000 cones were sold. The variable cost of a cone $1.50 and consists solely of the costs of the ice cream and the cone itself. The fixed expenses of the ice cream stand are $2,055 p veek. Required: . What profit did Maria earn during the first week when her price was $5.80? 2. At the start of the second week, Maria increased her selling price by what percentage? What percentage did unit sales decreas Round your percentage answers to 2 decimal place.) 3. What profit did Maria earn during the second week when her price was $6.30? 1. What was Maria's increase (decrease) in profits from the first week to the second week?

Maria Lorenzi owns an ice cream stand that she operates during the summer months in West Yellowstone, Montana. She is unsure o price her ice cream cones and has experimented with two prices in successive weeks during the busy August season. The num of people who entered the store was roughly the same each week. During the first week, she priced the cones at $5.80 and 2,460 cones were sold. During the second week, she priced the cones at $6.30 and 2,000 cones were sold. The variable cost of a cone $1.50 and consists solely of the costs of the ice cream and the cone itself. The fixed expenses of the ice cream stand are $2,055 p veek. Required: . What profit did Maria earn during the first week when her price was $5.80? 2. At the start of the second week, Maria increased her selling price by what percentage? What percentage did unit sales decreas Round your percentage answers to 2 decimal place.) 3. What profit did Maria earn during the second week when her price was $6.30? 1. What was Maria's increase (decrease) in profits from the first week to the second week?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The Cycle Shoppe has decided to offer credit to its customers during the spring selling season. Sales are expected to be 330 bicycles. The average cost to the shop of a bicycle is $300. The owner knows that only 93 percent of the customers will be able to make their payments. To identify the remaining 7 percent, she is considering subscribing to a credit agency. The initial charge for this service is $540, with an additional charge of $6 per individual report. What is the amount of the net savings from subscribing to the credit agency? A. $3,790 B. $3,920 C. $4,080 D. $4,410 E. $4,950
Maria Lorenzi owns an ice cream stand she operates during the summer months in West Yellowstone, Montana. She is unsure how to price her ice cream cones and has experimented with two prices in successive weeks during the busy August season. The number of people who entered the store was roughly the same each week. During the first week, she priced the cones at $4.40 and 2,075 cones were sold. During the second week, she priced the cones at $4.90 and 1,650 cones were sold. The variable cost of a cone is $.80 and consists solely of the costs of the ice cream and the cone itself. The fixed expenses of the ice cream stand are $2,020 per week. Required: 1. What profit did Maria earn during the first week when her price was $4.40? 2. At the start of the second week, Maria increased her selling price by what percentage? What percentage did unit sales decrease? Note: Round your percentage answers to 2 decimal place. 3. What profit did Maria earn during the second week when her price was $4.90?…
Sam's Auto Shop services and repairs a particular brand of foreign automobile. Sam uses oil filters throughout the year. The shop operates 52 weeks per year and weekly demand is 130 filters. Sam estimates that it costs $20 to place an order and his annual holding cost rate is $3 per oil filter. Currently, Sam orders in quantities of 650 filters. Calculate the total annual costs associated with Sam's current ordering policy. Total annual costs = $
The Shirt Works sells a large variety of tee shirts and sweatshirts Steve Hooper, the owner, is thinking of expanding his sales by hiring high school students, on a commission basis, to sell sweatshirts bearing the name and mascot of the local high school These sweatshirts would have to be ordered from the manufacturer six weeks in advance, and they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $20.00 each with a minimum order of 220 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 220 Since Hooper's plan would not require any additional facilities, the only costs associated with the project would be the costs of the sweatshirts and the costs of the sales commissions. The selling price of the sweatshirts would be $40.00 each. Hooper would pay the students a commission of $600 for each shirt sold Required: 1. What level of unit sales and dollar sales is needed to attain a target profit of $12.320? 2.…
The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is thinking of expanding his sales by hiring high school students, on a commission basis, to sell sweatshirts bearing the name and mascot of the local high school. These sweatshirts would have to be ordered from the manufacturer six weeks in advance, and they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $24.00 each with a minimum order of 186 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 186. Since Hooper's plan would not require any additional facilities, the only costs associated with the project would be the costs of the sweatshirts and the costs of the sales commissions. The selling price of the sweatshirts would be $48.00 each. Hooper would pay the students a commission of $6.00 for each shirt sold. Required: 1. What level of unit sales and dollar sales is needed to attain a target profit of $13,392?…
It costs Homer's Manufacturing $0.65 to produce baseballs and Homer sells them for $4.00 a piece. Homer pays a sales commission of 5% of sales revenue to his sales staff. Homer also pays $16,000 a month rent for his factory and store, and also pays $81,000 a month to his staff in addition to the commissions. Homer sold 69,500 baseballs in June. If Homer prepares a traditional income statement for the month of June, what would be his gross profit? Question 30 options: $45,175 $278,000 $323,175 $232,825
C. W. McCall sells a goldplated souvenir mug; McCall expects to sell 1,400 units for $35 each to earn a $15 contribution margin per unit. Janice McCall, president, expects the year’s total market to be 35,000 units. For the year just completed, the local college won the national hockey championship, and as a result, the total actual market was 150,000 units. C. W. McCall sold 3,000 units and calculates sales variances using contribution margin. What is the firm’s sales volume variance?
Zukiria Chicken Co. (JCC) is a chicken farm in Abbotsford, B.C. JCC reports under IFRS and has a December 31 fiscal year end. JCC also grows corn in the acres surrounding its chicken barns and sells the corn each August once the crop is harvested.JCC has four chicken barns, each with 12,000 laying hens. Each hen lays five eggs per week, which are sold to grocery stores. Eggs sell for $0.05 each, and JCC incurs $1,150 per week in egg packing and cleaning costs. Hens are kept for two years before needing to be replaced and are purchased in January 1 every second year for $0.75 each. After the two years, the laying hens are sold at a price of $0.45 each. If JCC disposed of the laying hens after one year, they would be sold at a price of $0.55 each.The hens currently owned by JCC have been around for one year. JCC’s corn seed is planted each April 1 at a cost of $0.20 per cornstalk. JCC planted 45 cornstalks per acre on each of its 36 acres. It costs JCC $1,000 in labour to plant the…
For Mardi Gras, Sassy Southerner Boutique purchased 700 sets of boxed jewelry sets to sell for $19.99. 150 boxes were sold at the regular price. Then, to encourage more customers to purchase the boxed sets, the remaining sets were marked down to $14.99, and 208 boxes were sold. The week of Mardi Gras, the buyer was concerned that she would still have boxes leftover, so she took another markdown to $9.99, and moved them to the cash register for a prominent display, and she sold 300 boxes at this price.
Hannah Ortega is considering expanding her business. She plans to hire a salesperson to cover trade shows. Because of compensation, travel expenses, and booth rental, fixed costs for a trade show are expected to be $10,660. The booth will be open 26 hours during the trade show. Ms. Ortega also plans to add a new product line, ProOffice, which will cost $190 per package. She will continue to sell the existing product, EZRecords, which costs $103 per package. Ms. Ortega believes that the salesperson will spend approximately 16 hours selling EZRecords and 10 hours marketing ProOffice. Required a. Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 73 units of EZRecords and 59 units of ProOffice.
Pam and Lenny’s ice cream shop charges $1.75 for a cone. Variable expenses are $0.42 per cone, and fixed costs total $2,500 per month. A "sweetheart" promotion is being planned for the second week of February. During this week, a person buying a cone at the regular price would receive a free cone for a friend. It is estimated that 625 additional cones would be sold and that 825 cones would be given away. Advertising costs for the promotion would be $170. Required: a. Calculate the effect of the promotion on operating income for the second week of February. (Do not round intermediate calculation and round your final answer to 2 decimal places.) b. Do you think the promotion should occur?multiple choice Yes No
Sheri is a car distributor in a rural area. She has customers that own relatively old cars. Tomaintain good customer service, Sheri keeps a small inventory of spare parts for old-modelscars. One item is brake boosters. Is a slow-moving item, and therefore she uses the periodicreview policy with a review period of two months. The annual demand for booster sets has anormal distribution with mean of 15 and standard deviation of 5. Because this item is out ofproduction, delivery lead time is five months. The cost of a set of boosters is $500. Sheri placeshigh value on maintaining customer satisfaction. Therefore, she considers goodwill to be crucial,and estimates the shortage cost to be $5000. Shortages are backlogged, and annual inventoryholding cost is 20%.a. Find the optimal target inventoryb. Find the implied service level for policy 1 and policy 2c. Find the safety stock for a set of brake boosters.d. Find the expected annual cost of the periodic review policye. Suppose a continuous…