Reference no: EM132937842
Question - Cost function; breakeven; quality of information; relevant range Oysters Away picks, shucks and packs oysters and then sells them wholesale to fine restaurants across the state. The statement of profit or loss for last year is as follows.
Revenue (based on sales of 2000 cases of oysters $200,000
Expenses:
Wages for pickers, shuckers and packers $100,000
Packing materials 20,000
Rent and insurance 25,000
Administrative and selling 45,000
$190,000
Pre-tax profit 10,000
Taxes (20%) 2000
After-tax profit $8,000
Pickers, shuckers and packers are employed on an hourly basis and can be laid off whenever necessary. Salespeople mostly deliver the product and are paid on a salaries basis.
Required -
a) Estimate the cost function for Oysters Away.
b) What is the breakeven point in cases for Oysters Away?
c) The manager thinks that the entity will harvest and sell 3000 cases of oysters next year. Estimate the after-tax profit.
d) Oysters Away harvested and sold 2000 cases in each of the last several years. What does this suggest about the quality of the income information you calculated in part ( c )?
e) Describe reasons why the cost function developed for the relevant range up to 2000 cases might not hold for 2001 to 3000 cases.
|
What were Starbucks total assets
: For this week's Critical Thinking assignment, locate the 2019 10-K Report for Starbucks Corporation. What were Starbucks total assets
|
|
Find what is the discounted payback period for company
: The interest rate is 6%. What is the discounted payback period? The cash flow for the next five years are $19,000, $15,000, $19,000.
|
|
Comment on security analyst statement
: Comment on security analyst statement - If a corporation doubles its leverage multiplier by issuing long term debt & repurchasing its common equity
|
|
What is the net present value of the project for lakecraft
: LakeCraft is considering investing in a cruise ship with an expected life of 20 years that costs $135 million. What is net present value (NPV) of the project?
|
|
Estimate the after-tax profit
: The manager thinks that the entity will harvest and sell 3000 cases of oysters next year. Estimate the after-tax profit
|
|
What is the discounted payback period for company
: What is the discounted payback period? Suppose a company had an initial investment of $50,000. The cash flow for the next five years are $19,000.
|
|
Find What is the amount of cost of goods sold
: Find What is the amount of cost of goods sold? At the end of the period, the physical count of inventory reveals that $10,000 of inventory is on hand.
|
|
Calculate the cost of goods manufactured
: Calculate the cost of goods manufactured using a cost of goods manufactured statement/schedule for 100,000 units of your product produced for the month
|
|
What are the value of the equity and total firm value
: What are the value of the equity and total firm value? A firm is currently financed with risk-free debt with a value of $100 million and 5 million shares
|