KESlate was a professional classical guitar player until a motorcycle accident at left him disabled After long months of therapy, he hired an experienced luthier and started a small shopto make and sell Spanish guitars. The guitars sell for $700 each, and the fixed monthly operating costs are as follows:Rent and utilitiesWages and benefits to luthierOther expenses$810$2,500$480Slate's accountant told him about contribution margin ration, and Slate understood clearly that for every dollar of sales. $0 50 went to cover his fixed costs, and anything above thatpoint was profitSlate is planning to increase the sales price to $820 What impact will the increase in sales price have on the breakeven point in units? (Round your answer up to the nearestwhole guitar)OA. It will stay the sameOB. It will go up from 8 to 11 unitsOC. It will go down from 11 to 8 unitsOD. It will go down from 10 to 8 unitsacros

To calculate the impact of the increase in sales price on the breakeven point in units, we first…

Answered: Slate was a professional classical…

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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) Charli was a professional classical guitar player until his motorcycle accident that left him disabled. After long months of therapy, he hired an experienced luthier (maker of stringed instruments) and started a small shop to make and sell Spanish guitars. The guitars sell for $700 and the fixed monthly operating costs are as follows: Rent and utilities $1,210 Wages and benefits to luthier 2,500 Other expenses 480 Charli's accountant told him about contribution margin ratios and he understood clearly that for every dollar of sales, $0.65 went to cover his fixed costs, and that anything past that point was pure profit. Charli wishes to earn $4,000 of operating profit each month. Calculate the number of guitars Colin will have to sell to achieve the target profit.
Please answer all parts of the question
Sam decided to start a printing company called, Sam Printing Inc. This company was his dream joband he saved up $30 000 to start the company therefore he didn’t need a loan from the bank. Samdid his first job for $300 to customer Mike. Mike paid him $200 and the rest on account. Sam wasrunning out of supplies so he had to buy pens, notebooks, paper etc for $500. He decided that heshould pay his rent for $200 and gas for $100. Sam was getting really busy and needed to buy acomputer. He paid $500 for an Acer laptop on account. He received a call from Mike who told himshe sent him the money he owed him. Sam is doing really well and decided to buy another store tocontinue his printing business. The store costs $5000. He needed a loan from the bank to purchasethis store. After receiving the loan he decided to pay off the Acer laptop. Use the template below:Prepare an income statement for Sam Printing Inc. using the following information to see ifhe is profiting or loosing?
Dr. MaGoo performs laser surgery to correct eye vision. He charges $800 for eye surgery (for a pair of eyes): Variable cost per eye surgery (per pair of eyes) are: Medical Supplies $35.00 Nurses time 65.00 Utilities for the machine 10.50 Variable marketing and administrative costs 24.50 The income tax rate is 30% Fixed overhead cost is $100,000 per year. Fixed selling and administrative costs are $25,000 per year. Dr. MaGoo performed 400 corrective eye surgeries last year. a. What is the contribution margin per eye surgery? b. Suppose that Dr. MaGoo wants to make a profit (after tax) of $100,000, how many eye surgeries must be sold? (Round to nearest dollar for tax calculation) c. Suppose that Dr. MaGoo has another option available, which uses a scalpel (cut and sew option) rather than the laser (laser option). This option reduces the fixed costs by $49,950 per year and increases variable cost by $150 per surgery. Assume 333 is the number…
Sally Sells Seashells by the Seashore. She pays kids $2 a bag for the shells they collect and she sells them for $5 a bag. The bags are 25 cents per piece. She has a stand on the boardwalk that costs her $35 a day and she needs to pay Rehoboth City 5% of sales. She has to get a new sign everyday for $15. Her brother mans the stand from 10 am to 1 pm for a $10 STEAM gift card and her sister takes over at 1 pm for $5 per hour. They close the stand at 9 pm. How many bags of seashells does Sally need to sell to breakeven?
Gerry likes driving small cars and buys nearly identical ones whenever the old one needs replacing. Typically, he trades in his old car for a new one costing about $15,000. A new car warranty covers all repair costs above standard maintenance (standard maintenance costs are constant over the life of the car) for the first two years. After that, his records show an average repair expense (over standard maintenance) of $2500 in the third year (at the end of the year), increasing by 50 percent per year thereafter. If a 30 percent declining-balance depreciation rate is used to estimate salvage values and interest is 9 percent, how often should Gerry get a new car? Click the icon to view the table of compound interest factors for discrete compounding periods when i = 9%. Gerry should get a new car every years, which has the (Round to the nearest whole number as needed.) EAC of $
You run a nail salon. Fixed monthly cost is $5,102.00 for rent and utilities, $5,992.00 is spent in salaries and $1,613.00 in insurance. Also every customer requires approximately $3.00 in supplies. You charge $90.00 on average for each service. You are considering moving the salon to an upscale neighborhood where the rent and utilities will increase to $11,786.00, salaries to $6,735.00 and insurance to $2,228.00 per month. Cost of supplies will increase to $7.00 per service. However you can now charge $167.00 per service. What is the PROFIT or Loss at the crossover point? If a loss include the - Round the quantity to 3 digits when using to calculate the profit Submit Answer format: Number: Round to: 2 decimal places.
A 91.
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Martin and her girlfriend took a week off from work to spend some time in a cottage in Mont-Tremblant. The weekly rent of the cottage was $1000. They spent about $200 in gasoline for the round trip. Meals and parking bill summed up to $500. Had the couple not gone for this mini-vacation, each of them would have earned $1000. The opportunity cost for the couple of taking this vacation is Select one: A. $3700. B. $2700 C. $1700 D. $2000 E. $0. Martin and her girlfriend took a week off from work to spend some time in a cottage in Mont-Tremblant. The weekly rent of the cottage was $1000. They spent about $200 in gasoline for the round trip. Meals and parking bill summed up to $500. Had the couple not gone for this mini-vacation, each of them would have earned $1000. The opportunity cost for the couple of taking this vacation is Select one: A. $3700. В. $2700 C. $1700 D. $2000 E. $0.
Marsha Jones has bought a used Mercedes horse transporter for her Connecticut estate. It cost $54,000. The object is to save on horse transporter rentals.Marsha had been renting a transporter every other week for $219 per day plus $1.95 per mile. Most of the trips are 80 or 100 miles in total. Marsha usually gives Joe Laminitis, the driver, a $30 tip. With the new transporter she will only have to pay for diesel fuel and maintenance, at about $0.64 per mile. Insurance costs for Marsha’s transporter are $2,150 per year.The transporter will probably be worth $34,000 (in real terms) after eight years, when Marsha’s horse Spike will be ready to retire. Assume a nominal discount rate of 7% and a 4% forecasted inflation rate. Marsha’s transporter is a personal outlay, not a business or financial investment, so taxes can be ignored.Calculate the NPV of the investment. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.)
Jefferson owns a new music label. They sign artists and help them record and distribute their music. It cost them $400 for marketing, music production and engineering for every 200 CDs they make. They sell CDs for $5 each to the artist (for them to sell at their gigs). Each year they have $5,000 of recurring expenses. In this scenario, match the appropriate variable in the break-even equation on the left to the correct value on the right. (note: you may need to do some math to arrive at the correct #) Price Fixed cost variable cost. .. .

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