Intermediate Financial Management
14th Edition
ISBN: 9780357516782
Author: Brigham, Eugene F., Daves, Phillip R.
Publisher: Cengage Learning
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Chapter 23, Problem 6MC
Summary Introduction
Case summary:
Person A the
She planned to use an example of Company’s “big ticket” items which is a customized computer microchip used in the company’s laptop. She planned to start the discussion by explaining some basic inventory concept. She asked person X to help her by way of answering the questions.
Characters in the case:
Person A- Financial manager of Company W
Person FW- CEO of the company
Person X-Assistant of person A
To determine: The inventory level Company W should reorder.
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How much is the price charged per unit if breakeven point is 8,500 units, variable cost per unit is $150, and total fixed costs is $297,500?
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Intermediate Financial Management
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- The total cost formula for a company can be modeled by TC = 12570+ 50x where x represents the number of items sold. A formula for the company's total income is modeled with TR 80x, where a represents the number of items sold. This company will breakeven when its total costs equal its total income. - How many items must this company sell to breakeven? Answer:arrow_forwardwhat is the Revenue, cost and profit functions for the problem below? Orange Company buys Product A for P15 per units and sells them for P25 per unit. There areno other variable costs. Fixed cost is P6,000. Use the breakeven formula to determine thefollowing:a. Revenue, cost and profit functions.arrow_forwardi need the answer quicklyarrow_forward
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- If fixed costs are $500,000 and the unit contribution margin is $20, what amount of units must be sold in order to have a zero profit?arrow_forwardWhich of the following is false? O If fixed costs are $100,000 and weighted-average unit contribution margin is $50, then the break-even point in units is 2,000 units. O If Conan Corporation sells two products with a sales mix of 75%-25%, and the respective contribution margins are $100 and $300, then weighted-average unit contribution margin is $150. O The weighted-average contribution margin cannot be used to calculate break-even sales for a mix of two or more products. O The weighted-average contribution margin of all the products is calculated when determining the break-even sales for a multi-product firm.arrow_forwardPlease answer with explanation. I will really upvotearrow_forward
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