Recalculate the cm ratio and breakeven in units

Assignment Help Financial Management

Reference no: EM131456000

In Year 1, Jay Company expects to sell 2,243 units at $110 per unit. Sales are expected to increase 25% each year for years 2-4. The unit sales price will remain the same. Labor is 23% of sales, Overhead 10%, Materials 5%, and Variable Sales and Admin, 4%. Fixed Costs, are Factory Overhead (2%) and Sales and Admin (4%). Interest expense of $425 is evenly budgeted over the period. The company tax rate is 20%.

1) If sales remain at the budgeted 4-year level, but fixed costs increase to $367,800, and the company wants to achieve target net income of $ $700,000, recalculate the CM ratio, Unit CM, Breakeven in units, Breakeven in dollars, and Target Breakeven in Units.

2) Create a breakeven chart for Jay Company based on unit increments of 250 and the revised fixed costs of $367,800. (Hint: You want to graph sales, fixed costs and total costs (total variable and fixed) on one scatter plot.) . ****Provide the steps in details how to creat the scatter plot in Excel.

Reference no: EM131456000

Questions Cloud

What would be the portfolios required rate of return : What would be the portfolio's required rate of return following this change?

Some provisions that are often contained in bond indentures : Listed below are some provisions that are often contained in bond indentures

What will be the new stock price : Ceejay Corporation's stock is currently selling for $30 per share. what will be the new stock price?

What will be the earnings before interest and taxes : If the company conducts a sensitivity analysis on the sales price using a price estimate of $16.25, what will be the earnings before interest and taxes?

Recalculate the cm ratio and breakeven in units : In Year 1, Jay Company expects to sell 2,243 units at $110 per unit. recalculate the CM ratio, Unit CM, Breakeven in units-Breakeven in dollars

Markets are regulated by a host of government agencies : Financial markets are regulated by a host of government agencies such as FINRA, SEC etc.

What is standard deviation of rate of return on investment : What is the standard deviation of the rate of return on this investment?

What will be the new stock price : If market risk (beta) increases by 50%, and all other factors remain constant, what will be the new stock price?

Interest rates are expressed as annualized rates for term : Interest rates are expressed as annualized rates for the term specified. Assume semi-annual compounding.

User Account

All Pages