Calculate the company break-even point for the current year

Assignment Help Accounting Basics
Reference no: EM132088570

Question - CVP analysis and financial modeling (adapted from CMA exam). Bronkowski is a retailer for high-tech recording disks. The projected operating profit for the current year is $200,000 based on a sales volume of 200,000 units. The company has been selling the disks for $16 each; variable costs consist of the $10 purchase price and a $2 handling cost. The company's annual fixed costs are $600,000.

Management is planning for the coming year, when it expects that the unit purchase price of the disks will increase by 30 percent.

a. Calculate the company's break-even point for the current year in units.

b. What will be the company's operating profit for the current year if there is a 20 percent increase in projected unit sales volume?

c. What volume of dollar sales must be achieved in the coming year to maintain the current year's operating profit if the selling price remains at $16?

d. Would the use of a financial model be helpful to the firm in addressing issues such as those raised in requirements b. and c.? Explain.

Reference no: EM132088570

Questions Cloud

Should birth control products be free to anyone : Should birth control products be free to anyone who wants to use it? Should birth control products, such as condoms
What might be the symptoms of anemia : What might be the symptoms of anemia that a person could learn to detect if it commonly occurs in their life?
Calculate the yearly amount of depreciation : Calculate the yearly amount of depreciation for the new building for the year ended 30 June 20x3 AND outline the required calculations
Methods-techniques of birth control : What are the statistical data on teen pregnancies across the United States?. Is it surprising of the teen pregnancy rates within the United States?
Calculate the company break-even point for the current year : CVP analysis and financial modeling (adapted from CMA exam). Calculate the company's break-even point for the current year in units
Men and women in the hematocrit concentrations : There is a definite difference between men and women in the hematocrit concentrations.
Please explain how rh factors involved with blood cells : Please explain how Rh factors involved with blood cells detrimental to the ability a couple has in trying to have a baby.
How will the decision affect the company operating profit : Should Road-Runner accept a special order for 400 units at a selling price of $30 each? How will the decision affect the company's operating profit
What do you think a plantar wart actually is : Also, it is known that we put medical terminology into "layman's terms" so it is easier to understand. What do you think a plantar's wart actually is?

Reviews

Write a Review

Accounting Basics Questions & Answers

  The colorado company manufactures a product that goes by

the colorado company manufactures a product that goes through three processing departments. information relating to

  Prepare the general journal entry to record depreciation

Prepare the general journal entry to record depreciation expense for the equipment in 2012

  The accrual of interest on december 31

On January 1, 2010, Divac Company issued $300,000 of 9%, 10-year bonds at par. Interest is payable quarterly on April 1, July 1, October 1, and January 1.

  Technology provides a vast array of communication outlets

Communicating in the workplace coupled with advances in technology provides a vast array of communication outlets. Various forms include formal writing, cell phones, pagers, e-mail, snail mail, and a culmination of social media networks. As indivi..

  Auditing-professional standards

In auditing a privately held entity, an auditor must follow the professional standards established by all of the following except:

  What amount of accrued vacation is reported

As of December 31, 2015 & 2016, respectively, Venture corp. has accrued vacation on its books of 19,000 and 21,000. What amount of accrued vacation is reported

  The owner of brooklyn restaurant is disappointed because

the owner of brooklyn restaurant is disappointed because the restaurant has been averaging 5000 pizza sales per month

  How to identify major classifications of the balance sheet

How to Identify Major Classifications of the Balance Sheet? Please explain with example

  Essential problems of attempts

‘The essential problems of attempts to classify financial reporting practices across the world are related to the suitability of the data upon which such classifications have been based.' Comment.

  Calculate earnings per share for the year ended

Net income for 2013 was $426 million. The income tax rate is 40%. Calculate earnings per share for the year ended December 31, 2013.

  Calculate their deduction for adjusted gross income

Arnold and Beth file a joint return. Use the following data to calculate their deduction for Adjusted Gross Income.

  Sales taxes at the time of sale

Leister Auto Supply does not segregate sales and sales taxes at the time of sale. The register total for March 16 is $15,540. All sales are subject to a 5% sales tax.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd