12.)Ger Corporation has fixed costs of $487,120. It has a unit selling price of
ID: 2442602 • Letter: 1
Question
12.)Ger Corporation has fixed costs of $487,120. It has a unit selling price of $6.27, unit variable cost of $4.44 and target net income of $1,925,003. Compute required sales in units to achieve its targeted net income._____units?
13.)Richard Casper owns the Fredonia Barber Shop. He employs 4 barbers and pays each a base rate of $1,100 per month. One of the barbers serves as the manager and receives an extra $6,040 per month. In addition to the base rate, each barber also receives a commission of $5.70 per haircut.
Other costs are as follows.
Advertising $200 per month
Rent $930 per month
Barber supplies $0.40 per haircut
Utilities $140 per month plus $0.30 per haircut
Magazines $20 per month
Matt currently charges $11.00 per haircut.
Determine the variable cost per haircut and the total monthly fixed costs:
Variable costs $ ________
Total fixed costs $________
14.)Tanck Manufacturing's sales slumped badly in 2011. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 546,300 units of product: Net sales $2,185,200; total costs and expenses $2,403,657; and net loss $218,457. Costs and expenses consisted of the amounts shown below.
Total Variable Fixed
Cost of goods sold $1,957,857 $1,385,088 $572,769
Selling expenses 247,200 75,200 172,000
Administrative expenses 198,600 47,500 151,100
Totals $2,403,657 $1,507,788 $895,869
Management is considering the following independent alternatives for 2012.
A.)Increase unit selling price 24% with no change in costs, expenses, and sales volume.
B.)Change the compensation of salespersons from fixed annual salaries totaling $111,800 to total salaries of $65,800 plus a 7% commission on net sales.
Compute the break-even point in dollars for 2011. _________?
Compute the break-even point in dollars under each of the alternative courses of action
A.)________
B.)________
Explanation / Answer
12 Fixed costs + target income= 1925003+487120 net Income per Unit = 6.27-4.44 2412123/1.83=1318100 units need to be sold 13 variable costs for the barbers: 5.70 supplies: 0.40 utilities:0.30 =6.40 Fixed costs barbers: 1100*4 manager bonus: 6040 advertising: 200 rent: 930 utilities: 140 magazines: 20 =11730 14) strange question I suppose the answers is 2403657 Break-even point is were cost equals income (no loss, no profit) A No change in cost thus 2403657 B (very stupid action) the costs increases, the commision is 2185200*0.07=152964 152964-46000(as a result of the reduced fixed salaries)=106964 Therefore the break point would be 2403657+106964=2510621
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