Hi expert please give me answer general accounting question The Tennis Shop sells premium tennis rackets. Currently, it sells12,000 rackets annually at an average price of $200 each. The shop isconsidering adding a mid-range line of rackets that would sell for $140each. Management estimates they can sell 5,000 of the mid-rangerackets but will lose 1,800 sales of the premium rackets as a result.What is the amount of the sales that should be used when evaluatingthe addition of the mid-range rackets?A) $340,000B) $700,000C) $360,000D) $2,400,000E) $260,000

Step 1: Definition of Relevant SalesRelevant Sales: The sales figure that includes the new product's…

Answered: The Tennis Shop sells premium tennis…

Essentials Of Business Analytics

1st Edition

ISBN:9781285187273

Author:Camm, Jeff.

Publisher:Camm, Jeff.

Chapter11: Monte Carlo Simulation

Section: Chapter Questions

Problem 3P

See similar textbooks

Similar questions

How much will the total revenue change if the new product line is introduced ? Please solve this question
Sparkle, Inc., sells customized accessories. Currently, it sells 10, 000 sparkly phone cases annually at an average price of $55 a case. It is considering adding a lower -priced (less sparkly) line of phone cases, which sell for $29 a pair. Sparkle, Inc., estimates it can sell 5,000 of the lower-priced cases but will sell 1,000 less of the higher-priced cases by doing so. What is the dollar amount of sales that should be used when evaluating the addition of the lower-priced phone cases?
Hyperion, Inc. currently sells its latest high-speed color printer, the Hyper 500, for $350. It plans to lower the price to $300 next year. Its cost of goods sold for the Hyper 500 is $200 per unit, and thi year's sales are expected to be 20,000 units.a) Suppose that if Hyperion drops the price to $300 immediatley, it can increase this year's sales by 25% to 25,000 units. What would be the incremental impact on this eyar's EBIT of such a price drop?b) Suppose that for each printer sold, Hyperion expects additional sales of $75 per year on ink cartridges for the next years, and Hyperion has a gross profit margin of 70% on ink cartridges. What is the incremntal impact on EBIT for the next three years of a priced drop this year?
Phlight Restaurant is considering a delivery service. The firm expects that sales from the new service will be $150,000 per year. Phlight currently offers a sit-down service with annual sales of $100,000. While many of the delivery sales will be to new customers, Phlight estimates that 60% of their current sit-down customers will switch and use the delivery service. The level of incremental sales associated with introducing the delivery service is closest to: Select one: a. $90,000 b. $150,000 c. $60,000 d. $120,000
I JUST NEED HELP WITH PART C!!!!!!
29) Foamsoft sells customized boat shoes. Currently, it sells 16,850 pairs of shoes annually at an average price of $75 a pair. It is considering adding a lower-priced line of shoes which sell for $59 a pair. Foamsoft estimates it can sell 4,500 pairs of the lower-priced shoes but will sell 1,100 fewer pairs of the higher-priced shoes by doing so. What is the estimated value of the erosion cost that should be charged to the lower-priced shoe project?
The Tick Tock Clock Company sells a particular clock for $75. The variable costs are $15 per clock and the breakeven point is 230 clocks. The company expects to sell 280 clocks this year. If the company actually sells 355 clocks, what effect would the sale of additional 75 clocks have on operating income? Explain your answer The sale of an additional 75 dlocks would aller an. operating income by the amount of The total effect would amount to 4
Biblio Files Company is making plans for its next fiscal year, and decides to sell two new types of bookshelves, Basic and Deluxe. The company has compiled the following estimates for the new product offerings. Type of Sales Price Variable Cost Bookshelf per Unit per Unit Basic Deluxe Type of Bookshelf The company is interested in determining how many of each type of bookshelf would have to be sold in order to break even. If we think of the Basic and Deluxe products as components of one overall enterprise product called "Combined," the unit contribution margin for the Combined product would be $2.31. Fixed costs for the upcoming year are estimated at $341,880. Recall that the totals of all the sales mix percents must be 100%. Determine the amounts to complete the following table. Basic $5.00 9.00 Deluxe $1.75 8.10 Percent of Sales Mix Break-Even Sales in Units Break-Even Sales in Dollars Target Profit Refer again to the income statements for Cover-to-Cover Company and Biblio Files…
Wall’s Pharmacy will have to sell a new product that has an estimated revenue of $5,100 per month and costs of $1,000 per month with an initial purchase of $28,000. How long will Wall's Pharmacy have to sell a new product if the MARR is 0% per month? Wall's Pharmacy will have to sell a new product for __ months.
The Widget Co. currently sells 800 widgets per week for a price of $7.00 each. Their market research indicates that for each $0.50 increase in price they will sell 25 fewer widgets per week. What price should they charge to maximize sales income?
McGilla Golf has decided to sell a new line of golf clubs and would like to know the sensitivity of NPV to changes in the price of the new clubs and the quantity of new clubs sold. The clubs will sell for $810 per set and have a variable cost of $410 per set. The company has spent $151,000 for a marketing study that determined the company will sell 55,000 sets per year for seven years. The marketing study also determined that the company will lose sales of 9,600 sets of its high-priced clubs. The high-priced clubs sell at $1,110 and have variable costs of $710. The company will also increase sales of its cheap clubs by 11,100 sets. The cheap clubs sell for $450 and have variable costs of $235 per set. The fixed costs each year will be $9,110,000. The company has also spent $1,120,000 on research and development for the new clubs. The plant and equipment required will cost $28,770,000 and will be depreciated on a straight-line basis. The new clubs will also require an increase in net…
Hyperion, Inc. currently sells its latest high-speed colour printer, the Hyper 500, for $371. It plans to lower the price to $318 next year. Its cost of goods sold for the Hyper 500 is $212 per unit, and this year's sales are expected to be 21,000 units. a. Suppose that, if Hyperion drops the price to $318 immediately, it can increase this year's sales by 27% to 26,670 units. What would be the incremental impact on this year's EBIT of such a price drop? b. Suppose that, for each printer sold, Hyperion expects additional sales of $78 per year on ink cartridges for the three years, and Hyperion has a gross profit margin of 61% on ink cartridges. What is the incremental impact on EBIT for the next three years of a price drop this year?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Business Analytics

Statistics

ISBN:

9781285187273

Author:

Camm, Jeff.

Publisher:

Cengage Learning,

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Essentials Of Business Analytics

Statistics

ISBN:

9781285187273

Author:

Camm, Jeff.

Publisher:

Cengage Learning,

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

SEE MORE TEXTBOOKS