remium Beds is a retailer of luxury bed frames located in Los Angeles, California. Due to a recent industry-wide financial crisis, the CFO of Premium Beds fears a significant drop in the firm's upcoming income stream. The CFO asked you to use the company financial information provided below. Sales price per unit $ 3,250.00 Per-unit variable costs: Invoice cost 2,500.00 Sales commissions 280.00 Total per-unit variable costs $ 2,780.00 Total annual fixed costs: Advertising $ 230,800 Rent 176,900 Salaries 385,800 Total annual fixed costs $ 793,500 If 3,550 bed frames were sold, Premium Bed's operating income (πB) would be: Multiple Choice $915,000. $955,000. $875,000. $1,015,000.
remium Beds is a retailer of luxury bed frames located in Los Angeles, California. Due to a recent industry-wide financial crisis, the CFO of Premium Beds fears a significant drop in the firm's upcoming income stream. The CFO asked you to use the company financial information provided below. Sales price per unit $ 3,250.00 Per-unit variable costs: Invoice cost 2,500.00 Sales commissions 280.00 Total per-unit variable costs $ 2,780.00 Total annual fixed costs: Advertising $ 230,800 Rent 176,900 Salaries 385,800 Total annual fixed costs $ 793,500 If 3,550 bed frames were sold, Premium Bed's operating income (πB) would be: Multiple Choice $915,000. $955,000. $875,000. $1,015,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Premium Beds is a retailer of luxury bed frames located in Los Angeles, California. Due to a recent industry-wide financial crisis, the CFO of Premium Beds fears a significant drop in the firm's upcoming income stream. The CFO asked you to use the company financial information provided below.
| Sales price per unit | $ | 3,250.00 | |
| Per-unit variable costs: | |||
| Invoice cost | 2,500.00 | ||
| Sales commissions | 280.00 | ||
| Total per-unit variable costs | $ | 2,780.00 | |
| Total annual fixed costs: | |||
| Advertising | $ | 230,800 | |
| Rent | 176,900 | ||
| Salaries | 385,800 | ||
| Total annual fixed costs | $ | 793,500 | |
If 3,550 bed frames were sold, Premium Bed's operating income (πB) would be:
Multiple Choice
-
$915,000.
-
$955,000.
-
$875,000.
-
$1,015,000.
-
$795,000.
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