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Bright Eyes manufactures and sells two products. The first product is a disposable contact lens set that lasts about 3 months. The second product is a wetting solution. Customers of the first product use one bottle of solution each month. As a result, bottles of solution outsell lens sets by a 3:1 ratio. Lens sets sell for $36 per set, and have a contribution margin ratio of 50%. The solution sells for $6 per bottle, but only generates variable costs of $1. The company's total fixed costs are $9,900,000. Problem (a) What level of total sales is necessary to achieve break even?
Problem (b) If a competitor began selling a wetting solution that forced Bright Eyes to reduce the price for its solution to $3 (to maintain market share and the 3:1 ratio of solution to lens), how many lens sets must be sold for the company to break even?
Assume that no correcting entries were made at December 31, 2010, or December 31, 2011 and that no additional errors occurred in 2012. Ignoring income taxes, by explain how much will working capital at December 31, 2012 be overstated or understate..
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What are the benefits and potential risk factors for undertaking such strategies in lieu of direct cash-oriented investments
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What are the ethical issues in this case, if any? Would you have any concerns if you worked for the accounting department? Can the system be improved? If so, how?
If consumption spending becomes more sensitive to changes in the real interest rate, how will the slope of the IS curve be affected?
Fajardo, the managing partner, is allowed a bonus of 20% with an income tax rate of 35%. What is the bonus on profit after deduction of bonus
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