Determine the break-even point in units for footwears sdn

Assignment Help Finance Basics
Reference no: EM132595871

Footwears Sdn. Bhd. manufactures a complete line of men's and women's dress shoes for independent merchants. The average selling price of its finished product is RM245 per unit. The variable cost for these same units is RM125 per unit. Foorwear's incurs fixed costs of RM425,000 per year.

In terms of financing the business, Footwears Sdn. Bhd. had obtained debt as one of the source of finance. The interest expense incurred for the firm is RM3750. Besides that the firm also used preferred stock as another source of finance in managing the business. Total preferred stock dividend incurred for the firm is RM 725. The firm is in the 35% tax bracket.

The company has been operating up to this point without much quantitative knowledge of the business and financial risks it faces. Thus, your supervisor's in the controller's office has just handed you a memorandum asking for written responses to the following items:

-Determine the break-even point in units for Footwears Sdn. Bhd

-Determine the sales volume in Ringgit for the firm to reach the break-even point.

-How to do a table showing all the necessary items for an income statement of the following   units of production sold: 5,500 units and 7,000 units. How the prepare the table sir?

-Calculate the degree of operating leverage (DOL) and degree of financial (DFL) leverage for the production and sales levels given in part c above.

Reference no: EM132595871

Questions Cloud

Do an internet search on international human rights : Do an Internet search on international human rights and/or fundamental moral rights. Can you find any moral rights that seem to be universally acknowledged
What is the minimum transfer price : If Altoona uses a negotiated transfer pricing system, what is the minimum transfer price that should be charged for this transaction
Calculate the contribution margin : Why is it important for a company to calculate the contribution margin, break even point, and margin of safety
What are the basic assumption behind the markowitz portfolio : What are the basic assumptions behind the Markowitz portfolio theory? Why Diversification Reduces or Eliminates Firm-Specific Risk?
Determine the break-even point in units for footwears sdn : Footwears Sdn. Bhd. manufactures a complete line of men's and women's dress shoes for independent merchants. The average selling price of its finished product
Create an accounting memo : Create an accounting memo in which you determine what Square's performance obligation should be based on our standard Terms of Service
Prepare the tax-related journal entries : Prepare the tax-related journal entries for 2019 to 2023. Brock Corp. believes that it will be able to use any loss carryforward in future years.
Corporate social responsibility : Corporate social responsibility is an emerging trend for businesses in today's environment.
Calculate the average age of receivables and sales revenue : Calculate the average age of receivables: (Accounts Receivable * 365) / Sales Revenue ratios and compare your results with industry benchmark

Reviews

Write a Review

Finance Basics Questions & Answers

  Amount of the annual interest tax shield

The tax rate is 35 percent. What is the amount of the annual interest tax shield?

  How a swot analysis can be used by an entrepreneur

Tutors thoughts on how a SWOT analysis can be used by an entrepreneur either at the pre-start-up stage or within the actual start-up of the company.

  What is the expected return on the bond

You are considering buying the bonds of a very risky company. A bond with a $100 face value, a 1-year maturity, and a coupon rate of 22% is selling for $95.

  Return trip the plane travels

The return trip on the same route, now with a headwind, takes 8 hours. Assuming both remain constant, find the speed of the plane and the speed of the wind.

  How can the adherence to high standards of ethical

How can the adherence to high standards of ethical business practice contribute to the goal of shareholder wealth maximization?

  Calculate the present value of the salary differential

Calculate the present value of the salary differential for completing the MBA degree. Calculate the present value of the cost of the MBA program.

  What is the expected return on xyz stock

The firm plans to increase the dividend by 4.8 percent per year indefinitely. What is the expected return on XYZ stock?

  What will the next year bring in patient volumes

Our annual budget basically is one big forecasting picture. What will the next year bring in patient volumes and how will that impact our bottom line?

  Calculate cash flow associated with the two heating model

Calculate the cash flow associated with the two heating models. What are the Net Present Values of the two models? Which system should be chosen? Calculate Equivalent Annual Annuity.

  Explain patient service revenue and other revenue

Explain Patient service revenue and other revenue. Gross revenue and net revenue. Charity care and bad debt losses on the income sheet.

  Who will manage the business on a day-to-day basis?

Create an organizational chart showing the management hierarchy and who is responsible for key functions.

  What is the best estimate of the nominal interest rate

what is the best estimate of the nominal interest rate on new bonds? Round your answer to two decimal places.

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