Ace Shoe Company sells heel replacement kits for men's shoes. It has fixed costs of $10 million and unit variable costs of $5 per pair. If the company charges $15 per pair, how many pairs must it sell to break even?
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- A suburban lawn-care company has nonincremental fixed costs of $6,000 per month. It currently services 400 lawns per month at an average price of $30 per lawn. The company’s variable costs are $15 per lawn. If the company’s total sales increase beyond 550 lawns per month (i.e., 150 more lawns than are currently serviced), new equipment would have to be purchased that would involve incremental fixed costs of $760 per month. (a) Calculate the breakeven sales level for a $5 per lawn price increase. Show your work. (b) Calculate the breakeven sales level for a $5 per lawn price decrease. Show your work. (Hint: consider the possibility of incremental fixed costs.) (c) Data from past price changes indicates that the company can expect a price elasticity of –1.2. Based on this price elasticity, calculate the unit sales change that the company could expect from a $5 price increase. Then calculate the unit sales change that the company could expect from a $5 price decrease. Show…Company E manufactures regulators at a labor cost of $90 per unit and material cost of $300 per unit. The fixed charges on the business are $15,000 per month and the variable costs are $20 per unit per month. If the regulators are sold to retailers at $600 each, how many units must be produced and sold per month to breakeven?You work for Bellevue Window Products. While performing an analysis for a new window product, you found a report from last year that provided the following information regarding the manufacture of a similar product: annual production rate = 40,000 units; selling price = $70 per unit; fixed production cost = $240,000 per year; variable production cost = $1,700,000 per year; variable selling expenses = $96,000 per year. As a first-cut, you decide to use this information to estimate (a) the breakeven production rate per year, (b) the company’s profit last year, and(c) the annual production rate that would generate a profit of $1,000,000 per year. What are your estimates? Draw the breakeven diagram and spreadsheet functions necessary to perform the analysis
- You work for Bellevue Window Products. While performing an analysis for a new window product, you found a report from last year that provided the following information regarding the manufacture of a similar product: annual production rate = 40,000 units; selling price = $70 per unit; fixed production cost = $240,000 per year; variable production cost = $1,700,000 per year; variable selling expenses = $96,000 per year. As a first-cut, you decide to use this information to estimate (a) the breakeven production rate per year, (b) the company’s profit last year, and (c) the annual production rate that would generate a profit of $1,000,000 per year. What are your estimates?A chemical engineer is considering two sizes of pipes for moving distillate from a refinery to the tank farm. A small pipeline will cost less to purchase (including valves and other appurtenances), but will have a high head loss and, therefore, a higher pumping cost. The small pipeline will cost $1.7 million installed and have an operating cost of $12,000 per month. A larger-diameter pipeline will cost $2.1 million installed, but its operating cost will be only $8000 per month. Which pipe size is more economical at an interest rate of 1% per month on the basis of an annual worth analysis? Assume the salvage value is 10% of the first cost for each pipeline at the end of the 10-year project.Rho Merchandising supplies T-shirts to AK Mart. Currently, Rho orders T-shirts from varioussuppliers. One of the T-shirts is ordered in batches of 150 units. It has been estimated that an annualdemand for T-shirts is 25,000 pieces. Furthermore, carrying cost is estimated to be P10 per T-shirt peryear. For the other policy to be optimal, determine what the ordering cost would have to be.
- Barney need to choose between two equipment for his project. Equipment A: First cost = 200,000.00, Annual Operating Cost = 32,000.00 , Annual Labor Cost = 50,000.00 , Property taxes = 3%, Payroll taxes = 4%, Estimated life = 10 years. Equipment B: First cost = 300,000.00, Annual Operating Cost = 24,000.00 , Annual Labor Cost = 32,000.00 , Property taxes = 3%, Payroll taxes = 4%, Estimated life = 10 years. If the minimum required rate of return is 15%, what is the equivalent uniform annual cost of Equipment B? a. P126,070 b. P124,030 c. P129,850 d. P130,870Wall’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 3% per month? Wall's Pharmacy will have to sell a new product for __ months.FEMA (Federal Emergency Management Agency) has ordered 25 specialized test units capable of field checking 15 separate elements in potable water inemergency situations. Thompson Water Works, Inc., the contractor, took 200hours to build the first unit. If direct and indirect labor costs average $50 perhour, and an 80% learning rate is assumed, estimate (a) the time needed to complete units 5 and 25, and (b) the total labor cost for the 25 units.
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