pays for a major portion of the cost of the marketing campaign. Calculate the last row, and check whether thetotal profit adds up correctly!Scenario One - No Price Change- Estimation of Batt-x's Profit from Gamma-ZRevenueCar SalesfromCost perBatt-XBatt-XBatt-XGrowth# of PacksPrice Per Gamma-ZBatteryPackCostProfitProfitYearCar Sales PredictionPer CarPack(SMillion)(SMillion) (SMillion)Growth-118,00020 S500 S180 S410 S148 S32This Year25,00039%20 S500 S250 S410 S205 S4539%+135,00040%20 $500 S350 S369 S258 S92104%+250,00043%20 S500 ?isTotal Profit337Note: You expect cost per battery pack reduce 10% annually for the next two years.

Calculations for last row: Revenue for year +2 = Car sales x # of packs per car x Price per pack…

pays for a major portion of the cost of the marketing campaign. Calculate the last row, and check whether the total profit adds up correctly! Scenario One - No Price Change- Estimation of Batt-x's Profit from Gamma-Z Revenue from Car Sales Cost per Batt-X Batt-X Batt-X Growth # of Packs Price Per Gamma-Z Battery Cost Profit Profit Year Car Sales Prediction Per Car Pack (SMillion) Pack (SMillion) (SMillion) Growth -1 18,000 20 s 500 S 180 S 410 S 148 $ 32 This Year 25,000 39% 20 S 500 S 250 S 410 S 205 S 45 39% +1 35,000 40% 20 $ 500 $ 350 S 369 S 258 S 92 104% +2 50,000 43% 20 S 500 ? Total Profit 337 Note: You expect cost per battery pack reduce 10% annually for the next two years.

pays for a major portion of the cost of the marketing campaign. Calculate the last row, and check whether the total profit adds up correctly! Scenario One - No Price Change- Estimation of Batt-x's Profit from Gamma-Z Revenue from Car Sales Cost per Batt-X Batt-X Batt-X Growth # of Packs Price Per Gamma-Z Battery Cost Profit Profit Year Car Sales Prediction Per Car Pack (SMillion) Pack (SMillion) (SMillion) Growth -1 18,000 20 s 500 S 180 S 410 S 148 $ 32 This Year 25,000 39% 20 S 500 S 250 S 410 S 205 S 45 39% +1 35,000 40% 20 $ 500 $ 350 S 369 S 258 S 92 104% +2 50,000 43% 20 S 500 ? Total Profit 337 Note: You expect cost per battery pack reduce 10% annually for the next two years.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 5DQ

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