Calculate the unit breakeven sales level

Assignment Help Accounting Basics
Reference no: EM132749590

Question - A company has been selling 660 units per month of a product at a price of $64. The product's variable costs are $36.

Required -

(a) The manager of this product is considering decreasing the product's price by 25 percent. Calculate the unit breakeven sales level for this possible price change. Show your work.

(b) If the market's price elasticity for this product is -2.6, should the product manager go ahead with the 25 percent price decrease? Justify your answer by showing and explaining your calculations.

(c) If the market's price elasticity is -2.6 and the product manager does go ahead with the 25 percent price decrease, calculate the monthly change in this product's profit due to the price decrease that the product manager could expect. Show your work.

Reference no: EM132749590

Questions Cloud

Compute the statutory income of Malik for the year : Malik is a general manager of Good Luck Sdn. Bhd. (GLSB) in Petaling Jaya. Compute the statutory income of Malik for the year of assessment 2019
Is there an ethical issue involved : The CFO discourages the chief Accountant from implementing the standard until the required date. Is there an ethical issue involved? If so how
What is the journal entry needed to record the LIFO effect : Splish's internal reports indicated that the FIFO inventory balance was $2,834,600. What is the journal entry needed to record the LIFO effect at December
What was the total of the current assets : Accordingly, what was the total of the current assets on Nadir's separate balance sheet at the time Apex acquired its 80% interest
Calculate the unit breakeven sales level : The manager of this product is considering decreasing the product's price by 25 percent. Calculate the unit breakeven sales level
What is the differentiation value of Hughes new gloves : The average pay rate for these workers is $16 per hour. What is(are) the differentiation value(s) of Hughes' new rubber gloves
Calculate the applicable self-employment tax : For each of the following individuals, calculate the applicable self-employment tax - Martin Hughes earns net self-employment income of $141,300
Boss was misinterpreting statistical data : Describe how you would handle a situation at a human services agency where your coworker or boss was misinterpreting statistical data.
Brachydactyly which results in short fingers and toes : Martha has an autosomal, recessive hereditary condition known as brachydactyly which results in short fingers and toes.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Which of the following is an intangible asset

Which of the following is an intangible asset - If an owner invests her laptop computer and printer in the business, there is an increase

  What will be the total relevant cost of 60000 subassemblies

that old equipment for producing subassemblies is worn out said paul taylor president of timkin company. we need to

  Type of technique

Describe why or why not a pure service industry (e.g. accounting or law firms) may or may not be able to implement this type of technique

  Explain the similarities and differences of the budgets

For this assignment, you must develop a 4-5-page memo that you will deliver to the board of directors of ICBI. You will describe what a financial reporting.

  Why accounting researchers criticize legitimacy theory

Why critical accounting researchers criticize legitimacy theory? What method would most likely be used if conceptual framework were the overriding regulations?

  Sherman construction company has entered into a contract

sherman construction company has entered into a contract beginning january 1 2013 to build a parking complex for the

  Should a liability be recorded for risk of loss

Should a liability be recorded for risk of loss due to lack of insurance coverage? Discuss.

  Compute the ratio of cash to monthly cash expenses

Compute the ratio of cash to monthly cash expenses - During 2012, Pierport Inc. has monthly cash expenses of $400,000

  Calculate the company debt-equity ratio

Calculate the company's Debt-Equity ratio as of 12/31/19 and 12/31/18. Calculate the company's Debt-Assets ratio as of 12/31/19 and 12/31/18

  A company makes telescopes all direct materials used inthe

a company makes telescopes. all direct materials used inthe production of telescopes are added at the beginning of

  How the overall management teams perform

Assesses how the overall management teams perform in terms of the four functions of management. Analyzes the basic legal, social, and economic environment

  You have invested 40 percent of your portfolio in an

you have invested 40 percent of your portfolio in an investment with an expected return of 12 percent and 60 percent of

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