Millie is looking at the sales forecast for the sales of classic waffles. She has given you some costs and revenue information to use when drawing a break-even chart. FORECASTS ... Variable costs Total fixed costs per month Sales price of the Classic Waffle $0.50 $800 $2.20 Millie Forecasts that up to 1800 people a month will buy a classic waffle at $2.20. Plot the following to draw a break-even chart for the classic waffles. Remember to label it fully (Costs, Revenue, Break-Even). You may find it helpful to complete the Activity Table before you start the chart. Finally shade the area wherein the profit is positive. Number of Waffles 1000 1800 Sales Revenue Variable Costs Fixed Costs Total Costs Break-even Quantity

Millie is looking at the sales forecast for the sales of classic waffles. She has given you some costs and revenue information to use when drawing a break-even chart. FORECASTS ... Variable costs Total fixed costs per month Sales price of the Classic Waffle $0.50 $800 $2.20 Millie Forecasts that up to 1800 people a month will buy a classic waffle at $2.20. Plot the following to draw a break-even chart for the classic waffles. Remember to label it fully (Costs, Revenue, Break-Even). You may find it helpful to complete the Activity Table before you start the chart. Finally shade the area wherein the profit is positive. Number of Waffles 1000 1800 Sales Revenue Variable Costs Fixed Costs Total Costs Break-even Quantity

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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Cafe X is selling coffee in three different sizes at the prices and costs shown in the first table below. As shown in the second table, they are considering raising the price of their small to $2.75, and they project that sales of smalls will go down while sales of mediums and larges will go up slightly. Fill out the tables below to calculate the projected change in gross margin based on the estimated changes in cups sold. You may find it helpful to use a spreadsheet for the calculations. Increased Price for Small Coffee Small 0 Large Price per Cup Total Cost per Cup Est. Change in Cups Sold with Small @ $2.75 Medium $3.50 $0.35 +6% $2.75 $0.20 -10% $4.50 $0.50 +3% Cups Sold 0 0 0 $ 0 $ Revenue 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 COGS Change in Gross Margin (positive number for increase, negative for decrease): $ $ 0 $ 0 $ 0 $ Gross Margin 0 ▾
Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand is $50.00. Her best guess is that she can sell 300 cups per week at $0.50 per cup. The variable cost of producing a cup of lemonade is $0.20. a. Given her other assumptions, what level of sales volume will enable Julie to break even? b. Given her other assumptions, discuss how a change in sales volume affects profit. c. Given her other assumptions, discuss how a change in sales volume and variable cost jointly affect profit.
Derby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics. Sales price $ 22 per unit Variable costs 5 per unit Fixed costs 25,000 per month Assume that the projected number of units sold for the month is 7,000. Consider requirements (b), (c), and (d) independently of each other. Required: a. What will the operating profit be? b. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent? c. What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? d. Suppose that fixed costs for the year are 10 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much?
Assume that you are in charge of pricing for a firm that produces pickles. You have fixed costs of $2,000,000. Variable costs are $0.75 per jar of pickles. You are selling your product to retailers for $0.89. You sell the pickles in cases of 24 jars per case. a. How many jars of pickles must you sell to break even? b. How much must you sell in dollars to break even? c. How many jars of pickles must you sell to break even plus make a profit of $300,000? d. Assume a retailer buys your product for $0.89. His business requires that he prices products with a 35 percent markup on cost. Calculate his selling price. e. Assume you have an MSRP of $1.39 for the pickles. If a retailer has a required 35 percent retailer margin on all products he sells, what is the most he is willing to pay the producer for the pickles? f. A clothing retailer knows that to break even and make a profit he needs to have a minimum retailer margin (also referred to as a contribution margin or gross margin) of at least…
Derby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics. Sales price $ 21 per unit Variable costs 7 per unit Fixed costs 27,000 per month Assume that the projected number of units sold for the month is 7,000. consider requirements (b), (c), and (d) independently of each other. Required: a. What will the operating profit be? B. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent? c. What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? d. suppose that fixed costs for the year are 10 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much? complete this question by entering your…
Derby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics. Sales price $ 21 per unit Variable costs 7 per unit Fixed costs 27,000 per month Assume that the projected number of units sold for the month is 7,000. consider requirements (b), (c), and (d) independently of each other. Required: a. What will the operating profit be? B. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent? c. What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? d. suppose that fixed costs for the year are 10 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much? complete this question by entering your…
Cheesecake Etc. is considering on expanding their menu selection by adding the following products shown in the table below. Their annual fixed costs is Php 50,000. The shop is open for 25 days per month. Monthly demand from a similar store is used as shown in the table. Price per Variable Estimated Item Cost Demand Chicken Salad Clubhouse Sandwich Carbonara Muffin Hot Chocolate serving * 185.00 - 155.00 - 175.00 6.50 250 7.40 220 9.75 180 65.00 3.25 120 55.00 2.45 240 Compute for the following: a. What is the monthly break-even point? Php Blank 1 Remarks (0): Round off up to 2 decimal places b. Units to be sold monthly to break-even? Chicken Salad = Blank 2 Clubhouse Sandwich = Blank 3 Carbonara = Blank 4 Muffin = Blank 5 Hot Chocolate = Blank 6 Remarks (b): Express final answer as a whole number Blank 1 Add your answer Blank 2 Add your answer Blank 3 Add your answer Blank 4 Add your answer Blank 5 Add your answer Blank 6 Add your answer
Assume that you are in charge of pricing for a firm thatproduces pickles. You have fixed costs of $2,000,000.Variable costs are $0.75 per jar of pickles. You are selling your product to retailers for $0.89. You sell thepickles in cases of 24 jars per case.a. How many jars of pickles must you sell to breakeven?b. How much must you sell in dollars to break even?c. How many jars of pickles must you sell to breakeven plus make a profit of $300,000?d. Assume a retailer buys your product for S0.89.His business requires that he prices products witha 35 percent markup on cost. Calculate his sellingprice.e. Assume you have an MSRP of $1.39 for the pickles.If a retailer has a required 35 percent retailer margin on all products he sells, what is the most he iswilling to pay the producer for the pickles?f. A clothing retailer knows that to break even andmake a profit he needs to have a minimum retailermargin (also referred to as a contribution margin orgross margin) of at least 60 percent. If he…
Apply mathematical skills around cost structures and appropriate equations to answer the following, inclusive of all associated workings to maximise marks: A convenience store buys 1-gallon jugs of milk for $2.99 and sells them for $4.29. What is the margin they earn on the milk? Please round your answer to the nearest tenth of a percent.
The annual demand for a particular chemical product is 1,200 units. Suppose that the annualholding cost is $24 per unit, and the ordering cost is $100.Part A: Find the optimal order quantity based on EOQ analysis, and calculate the combinedannual ordering and holding cost.Part B: Now suppose that the store manager finds out that the demand has been underestimated.Specifically, the correct annual demand is 1,500 units. On the other hand, due to operationalrestrictions she cannot change the order quantity and thus use the same order size from part A.How much this error cost the store? (This can also be considered as a penalty for parametermisestimation).
Use the following information to answer questions 6 & 7 Trader Tom's makes and sells frozen 4-cheese pizzas, New York style. The expected selling price is $10 per pizza. The projected variable cost per pizza is $6. The estimated fixed costs per month are $12,000. Determine the number of pizzas that must be sold to make a monthly Net Income of $20,000? If fixed costs increase by $5,000 and 6,000 pizzas are sold in a given month, determine the Net Income for that month?
4. Assume you are the logistics manager of Apple and need to get 2000 latest MacBook (Retails at $2000 each) to market. Choices include: Rail, cost $1000 and takes a week Air, cost $5000 and take a day Which would you choose? Assume the yearly profit as 10% of sales. Hint – Find cost incurred by the manufacturer per day based on yearly profit. Use that value to find the total cost for each shipping method (shipping charge plus daily costs).