Question 3 nbsp nbspsmith inc manufactures and sells fan

Reference no: EM13357057

Question 3: Smith Inc. manufactures and sells fan belts. The selling price for these fan belts is $7.00, which is what Smiths competitors charge, as the fan belt is a commodity. Facts for Smith are as follows:

• Smith desires a 12 percent return on its total assets which are $3,000,000.

• Smith has a current sales volume of 500,000 units.

• Variable costs are $4.50 per unit, $3.00 for manufacturing and $1.50 for marketing and administrative costs.

• Fixed costs are $950,000.

Required:

a) Can Smith achieve its desired profit?

b) Suppose that Smith follows a strategy of one of its competitors which is to spend $200,000 on advertising so that there is more brand awareness. This would permit them to raise the selling price to $9 but their sales volume would decrease to 425,000 units. Will Smith achieve its desired profit?

Reference no: EM13357057

Questions Cloud

Question 5nbspnbspnbspnbspnbsp ddd grills inc makes a : question 5nbspnbspnbspnbspnbsp ddd grills inc. makes a single product-a handmade nbspspecialty barbeque grill that

Multiple choice questions in nuclear chemistry1as the : multiple choice questions in nuclear chemistry.1.as the temperature of a sample of a radioactive element decreases the

Question 4 nbspsuppose ritz-carlton has a 400-room hotel in : question 4 nbspsuppose ritz-carlton has a 400-room hotel in a tropical climate. nbsp management expects occupancy rates

Multiple choice questions in radioactive decay1an alpha : multiple choice questions in radioactive decay.1.an alpha alpha particle is essentially a

Question 3 nbsp nbspsmith inc manufactures and sells fan : question 3 nbsp nbspsmith inc. manufactures and sells fan belts. nbspthe selling price for these fan belts is 7.00

Multiple choice questions in nuclear reactions1 to make : multiple choice questions in nuclear reactions.1. to make nuclear fission more efficient which device is used in a

Multiple choice questions in nuclear chemistry1 : multiple choice questions in nuclear chemistry.1. magnesium-28 decays via beta emission which equation represents the

Question 2 deep blue manufactures floatation vests in : question 2 deep blue manufactures floatation vests in charleston south carolina.nbsp deep blues contribution margin

Determine the partial pressure and total pressure of the : determine the partial pressure and total pressure of the gases.1.suppose two gases in a container have a total pressure

User Account

All Pages