Calculate the new ebit and percent change

Assignment Help Business Management
Reference no: EM131105045

Problem 1:

Surf Bicycles Inc. Will manufacture and sell 200,000 units next year.  Fixed costs will total $500,000, and variable costs will be 60% of sales. The bicycles will sell for $200 each.

The firm wants to achieve a level of earnings before interest and taxes of $250,000.  How many units must they sell to achieve that result?

Problem 2:

Alpha Electronics has the following income statement:

Sales

400,000

Total variable costs

240,000

Contribution margin

160,000

Fixed costs

140,000

EBIT

20,000

Calculate the new EBIT and percent change, assuming:

1. Sales increase by 20%

2. Sales decrease by 20%

Reference no: EM131105045

Questions Cloud

Firm weighted average cost of capital : This debt has a 9 percent coupon and pays interest annually. What is the firm's weighted average cost of capital?
Compute the cash collected from clients during the year : Compute the following amounts: Cash collected from clients during the year, Cash paid for advertising expense and Cash paid to suppliers for inventory
What is the integral of the gauss curvature over the region : Let M = {(x, y, z) ∈ R3| z = x2 + y2 - 1}, and let C be the circle along which M intersects the xy-plane. What is the integral of the Gauss curvature over the region of M that is bounded by C
Advise the company whether the machinery : Advise the company whether the machinery should be purchased or not on the basis of the Net Present Value
Calculate the new ebit and percent change : Surf Bicycles Inc. Will manufacture and sell 200,000 units next year.  Fixed costs will total $500,000, and variable costs will be 60% of sales. The bicycles will sell for $200 each.
Show that the scattering parameters for an fet : Show that the scattering parameters for an FET can be expressed in terms of the parameters of the equivalent circuit of Figure 11.21 as given below. Assume the device is unilateral
Suggest which policy is the best : Suggest which policy is the best (Assume 360 days in a year)
What are the differences in color smell and visibility : From the introduction to this lab, you know that there are typically five steps involved in the water treatment process. Identify the processes (e.g., coagulation) that were used in this lab. Additionally, describe how each of the processes were ..
For the basic eoq model : For the basic EOQ model, use the square root formula to determine how Q* would change for each of the following changes in the costs or the demand rate. (Unless otherwise noted, consider each change by itself.)

Reviews

Write a Review

Business Management Questions & Answers

  Difference between efficiency and effectiveness

Discuss the difference between 'efficiency' and 'effectiveness', and identify real organizations that you think are, or are not, efficient and effective

  Make a crisis situation related to your field field of

make a crisis situation related to your field field of interest or place of work and simulate a press conference. write

  Show gender compensation discussion

Show Gender Compensation Discussion - How should the female handle this type of situation? Looking for different views and ideas on this type of situation.

  Recognized gain or loss on sale of the ross stock

Unsure of the outcome of the lawsuit, Leona sells 300 shares of the stock for $5,400 on October 12, 2010. What is her recognized gain or loss on the sale of the Ross stock?

  A clothing company uses sweatshop labor to manufacture

A clothing company uses sweatshop labor to manufacture clothing products that contribute to low pricing, which is a consumer want.Many companies have engaged in sweatshop labor. Did the clothing company engage in unethical labor practices by ut..

  Explain how and why has corporate downsizing

Explain how and why has corporate downsizing been effected in the last 18-months? Why have so many employees been laid off? What are some of the statistics of lay-off/corporate downsizing?

  Whistle blowing utilitarian theory

"Anonymous Whistle-blowing is never morally justified because it violates the rights of the accused to their accusers." Is this statement is true, according to the utilitarian theory? Carefully explain the theory and be specific.

  What is the fixed cost and what is the variable cost

Simon Tam is negotiating passage on Serenity as a clandestine fugitive from the planet Persephone. He is told that the 184 million kilometre trip to Osiris will cost $3,230. Alternatively, he can take a 344 million kilometre trip to Bellerophon, but ..

  Production and production budgets - robert co is

production and production budgets - robert co is forecasting sales units to produce raw materials to be usedrobert co.

  Problem regarding the administrative activities

1. Enabling legislation must be passed by an administrative agency before it begins any administrative activities. 2. Most administrative agencies do not have rule-making or adjudicatory powers.

  Strategic decisions

Why are strategic decisions different from other types of decisions?

  Program evaluation - policies and the best interests of the

program evaluation - policies and the best interests of the peoplewhen we consider the impact that implemented policies

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