Profit decisions are important to the Martins. These decisions arise from understanding the market, pricing policies and margins. The managers need to understand the appropriate tools and elements as they target profit levels and their ability to manage the elements of the profit calculation. For example, if CompuTech is operating at a loss or below break-even, then must understand how they can manage costs or volumes to generate profits. Break-even analysis can help the Martins and CompuTech decide how many units they need to sell, what price should they sell at, fixed costs levels, and what product or service they should promote. Given the following: (i) CompuTech's products are sold for $100 per unit (ii) CompuTech's products cost $60 per unit (Raw Materials) components (iii) Fixed Costs are determined by the Income Statement. Q1: Create a data table and CVP table to reflect the available information. (Yes, you will need to reference your work from Module 2). Q2: What is the break-even in units for CompuTech in 2021? Q3: Variable cost of materials rose by 10% during the year, and CompuTech plans to hire a student (annual cost for Part Time service is $30,000 per year) to help CompuTech's marketing. How does the variable cost increase and hire impact CompuTech's break-even?
Profit decisions are important to the Martins. These decisions arise from understanding the market, pricing policies and margins. The managers need to understand the appropriate tools and elements as they target profit levels and their ability to manage the elements of the profit calculation. For example, if CompuTech is operating at a loss or below break-even, then must understand how they can manage costs or volumes to generate profits. Break-even analysis can help the Martins and CompuTech decide how many units they need to sell, what price should they sell at, fixed costs levels, and what product or service they should promote. Given the following: (i) CompuTech's products are sold for $100 per unit (ii) CompuTech's products cost $60 per unit (Raw Materials) components (iii) Fixed Costs are determined by the Income Statement. Q1: Create a data table and CVP table to reflect the available information. (Yes, you will need to reference your work from Module 2). Q2: What is the break-even in units for CompuTech in 2021? Q3: Variable cost of materials rose by 10% during the year, and CompuTech plans to hire a student (annual cost for Part Time service is $30,000 per year) to help CompuTech's marketing. How does the variable cost increase and hire impact CompuTech's break-even?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Profit decisions are important to the Martins. These decisions arise from understanding the market,
pricing policies and margins. The managers need to understand the appropriate tools and elements
as they target profit levels and their ability to manage the elements of the profit calculation. For
example, if CompuTech is operating at a loss or below break-even, then must understand how they
can manage costs or volumes to generate profits. Break-even analysis can help the Martins and
Compu Tech decide how many units they need to sell, what price should they sell at, fixed costs
levels, and what product or service they should promote.
Given the following:
(i) CompuTech's products are sold for $100 per unit
(ii) CompuTech's products cost $60 per unit (Raw Materials) components
(ii) Fixed Costs are determined by the Income Statement.
Q1: Create a data table and CVP table to reflect the available information. (Yes, you will need to
reference your work from Module 2).
Q2: What is the break-even in units for CompuTech in 2021?
Q3: Variable cost of materials rose by 10% during the year, and CompuTech plans to hire a
student (annual cost for Part Time service is $30,000 per year) to help CompuTech's marketing.
How does the variable cost increase and hire impact CompuTech's break-even?
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