The manager of Bernadette Company bas a plan to increase sales volume ut the store. The average operating results for each week are given belovw: Sales revenue P120,000 Variable costs 90,000 Fixed costs for one week 20,000 The manager plans to bring shoppers into the store by having a week raffle for a prize of P2,000. For every twenty pesos of merchandise purchased. the shopper will receive a numbered ticket for the raffle. The variable cost to print and distribute the tickets has been estimated at P0.40 per ticket. Promotion and other fixed costs in connection with the raffle have been estimated at P1,000 per week. The manager estimated that sales can be doubled with the weekly raffle. The regional manager is skeptical and believes that the cost of promotion will be vary high although it may inerease sales slightly to P130,000 a week. REQUIRED: 1. Compute the average weekly net income they are making at present without the raffle. 2. Compute the sales revenue required to break-even without the raffle. : Compute the sales revenue required to break-even with the raffle.

The manager of Bernadette Company bas a plan to increase sales volume ut the store. The average operating results for each week are given belovw: Sales revenue P120,000 Variable costs 90,000 Fixed costs for one week 20,000 The manager plans to bring shoppers into the store by having a week raffle for a prize of P2,000. For every twenty pesos of merchandise purchased. the shopper will receive a numbered ticket for the raffle. The variable cost to print and distribute the tickets has been estimated at P0.40 per ticket. Promotion and other fixed costs in connection with the raffle have been estimated at P1,000 per week. The manager estimated that sales can be doubled with the weekly raffle. The regional manager is skeptical and believes that the cost of promotion will be vary high although it may inerease sales slightly to P130,000 a week. REQUIRED: 1. Compute the average weekly net income they are making at present without the raffle. 2. Compute the sales revenue required to break-even without the raffle. : Compute the sales revenue required to break-even with the raffle.

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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A door manufacturer decides to sell each door for $ 479. It has a manufacturing cost ofdoor is $ 237 and fixed costs are $ 4,114 a week.1. How many doors should you produce and sell each week in order to guaranteethe business to break even?2. If you sell 65 doors per month you could guarantee your breakeven point. Explain your answer.
Atlantis Company is placing an ad in the local paper to advertise its products. The ad will run for one week at a total cost of P5, 500. Atlantis Company has four categories of products as follows: Product category % of floor space occupied Expected sales value A 20 P35,000 B 15 15,000 C 45 64,500 D 20 25,500 What amount of advertising cost should be allocated to product category A, B, C, and D assuming Atlantis allocates based on percent of floor space occupied?
Assume that a prospect is interested in purchasing 4 tickets in a 20-game season ticket package. The prospect estimated that the sales force can close 20% of the deals after attending a game with an average of 1.5 transactions per customer. On average, those sales will be approximately $1,500. Assuming the cost of the package is $10,000, calculate the return on investment for the business. would like you to identify the following: • Total number of tickets in the ticket package? • Assuming the prospect will send 1 sales person to each game, how many tickets will they use in total for their potential customers? • How many customers will they gain using 20% as a conversion rate ? • Total number of transactions from customers ? • Total Revenue Generated ? • Return on Investment ? Explain how you arrived at your final numbers.
Betsy's Gift Baskets sells gift baskets, on average, for $125; each gift basket costs, on average, $60. Betsy pays salaries each month of $1,300 and her store rent is $1,000 per month. She also pays sales commissions of 5% of the sales price. In May, 140 gift baskets were sold. Required: a. Prepare a traditional income statement for the month of May. b. Prepare a contributio
Wild-Water Works Water Park provides for a fun day by offering a variety of rides. Wild-Water Works Water Park sells tickets at $74 per person as a one-day entrance fee. Variable costs per person are $34 and fixed cost amount to $222,300 per month.Wild-Water Works Water Park expects to sell 7,900 tickets. Find break-even first, then compute the margin of safety in tickets and sales in dollars.
Fruit Computer Corporation makes custom fruit shaped computers. It is currently producing 60 computers per month. Data are as follows: Sales price per unit $800 Variable cost per unit 600 Fixed costs per month 5600 If Fruit Computer Corporation expects to sell 50 units per month, how much is its margin of safety expressed in sales revenue? O $22,400 O $13,200 O $17,600 O $40,000
A merchandiser plans to sell 12,100 units next month at a selling price of $110 per unit. It also gathered the following cost estimates for next month: Cost Cost of goods sold Advertising expense Depreciation expense Shipping expense Administrative salaries Sales commissions Insurance expense Cost Formula $60 per unit sold. $150,000 per month $70,000 per month. $100,000 per month +$10 per unit sold $50,000 per month. 5% of sales $15,000 per month What is the estimated total contribution margin for next month?
A December promotion of 1,500 crystal bud vases to retail at $40 each is planned. The buyer requires a 48.5% average markup and has made an initial purchase consisting of 1,200 units costing $23 each. What is the cost to be paid on each remaining unit?
A restaurant has 145 seats needs $60,000 to earn the annual interest payment to the bank. Its monthly fixed labor cost is $7,800 along with other annual fixed cost of $270,000. It has a guest check average of $22 and per guest average cost of $15.50. What revenue is needed to cover all costs? What average daily seat turnover will be needed, assuming the operation is closed 3 days a year?
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