User Account

All Pages

Cost-volume-profit analysis

Assignment Help Finance Basics
Reference no: EM13949731

1. Cost-Volume-Profit Analysis

Johnson, Inc. projects sales for next year will be 60,000 units if the sales price is $28. At this level, unit fixed costs will be $8 while total variable costs will be $720,000. The vice president of marketing advises management to reduce sales price to $26 and to undertake a national advertising campaign costing $10,000.

a. What is the break-even point for the company in terms of dollars and units before giving effect to the vice president's plan?

b. What is the break-even point in units after giving effect to the plan?

c. The vice president believes that his plan will result in a before tax earnings of $56,000. How many units must be sold to reach this earnings level?

d. Using the graph on the next page, create a Cost-Volume-Profit graph for the answer to part (b). Label all parts of the graph and show your work.

 

Reference no: EM13949731

Questions Cloud

Why are t-bond returns high when the market returns are low : "Why are t-bond returns high when the market returns are low"
How much sales revenue must be earned to produce profits : How much sales revenue must be earned to produce profits equal to 20 percent of sales revenue? Prepare a contribution income statement to verify your answer.
What does it mean to have a significant interaction : How would you explain the logic of ANOVA to someone with no experience? What does it mean to have a significant interaction (in ANOVA)? Discuss by using examples.
What was the dividend yield : With 50 million shares outstanding and a stock price of $60, what was the dividend yield?
Cost-volume-profit analysis : Johnson, Inc. projects sales for next year will be 60,000 units if the sales price is $28. At this level, unit fixed costs will be $8 while total variable costs will be $720,000. The vice president of marketing advises management to reduce sales pric..
Why these four concepts are important for you intellectually : Can you discuss why these four concepts are important for you intellectually and/or professionally.
Demonstrate understanding of the manual accounting process : Demonstrate an understanding of the manual accounting process in an accounting information system, students will be required to identify and record transactions and process them to the preparation of financial reports.
The budgeted beginning cash balance : The desired ending cash balance is $40,000. To attain its desired ending cash balance for December, the company needs to borrow:
Find relationship between independent and dependent variable : Which regression models explain less than 50% of the observed variation between the actual values of the dependent variable and the mean value of the dependent variable values for the sample data set?

Reviews

Write a Review

Finance Basics Questions & Answers

  Determine which software packages are used by your local law

Perform some research, and determine which software packages are used by your local law enforcement agency and the economic and financial analysis techniques that were used to justify their use.

  What are your winnings worth today

The relevant nominal discount rate is 6.3 percent and the inflation rate is 4.5 percent. What are your winnings worth today?

  Calculate the weighted average cost of capital on the basis

calculate the weighted average cost of capital on the basis of historical market value weights forlong-term debt

  Compute the amount of risk adjusted assets

Compute the amount of risk adjusted assets (TRAA). Compute the amount of Tier 1 Common Equity. Compute the amount of Tier Total Capital. Compute common equity tier 1 percent.

  Determine the total dollar amount of your profit or loss

one year ago you sold a put option on 100000 euros with an expiration date of 1 year.you received a premium on the put

  Suppose the average inflation rate over this period was 20

youve observed the following returns on crash-n-burn computers stock over the past five years 11 percent11 percent 18

  Jones footwear pays a constant annual dividend last year

jones footwear pays a constant annual dividend. last year the dividend yield was 2.8 percent when the stock was selling

  Growth in sales goal

Explain how would you use the time value of money concept to make a decision on what growth in sales goal would you set for this company so that the company maintains the same operating margin for the next five years.

  Yu must use different angle of view that you found from

facts of tapering on unemployment in usayou must use different angle of view that you found from

  Is the irr you calculated the mirr of the project

In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are "blocked" and must be reinvested with the government for one year. The reinvestment rate for these funds is 4 percent..

  How much will mr. robbins pay for the bond

If the prevailing annualized yield on other bonds with similar characteristics is 6 percent, how much will Mr. Robbins pay for the bond? A) $1,000.00 B) $1,147.20 C) $856.80 D) none of these

  What is the standard deviation of that selection

The game show has placed a subliminal message on the curtain containing the gag prize, which makes the probability of choosing the gag prize equal to 75 percent.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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