Toy box inc is contemplating expanding their sales of their

Assignment Help Accounting Basics

Reference no: EM13387463

Toy Box Inc. is contemplating expanding their sales of their children's toys. The have an opportunity to stock and sell the X toy that has been a big hit with children everywhere. They need to order the X toys from the manufacturer in a minimum order of 100 at a cost of $12 each. They could resell the X toy in their store for $22 each.

Due to anticipated demand, Toy Box Inc. will need to hire an additional part-time cashier at $600 a month which will be classified as a fixed-cost attributable to the X toy. Also, they have offered a $1 sales commission per toy to their floor sales representative. They will also include a package of trading cards with every purchase of an X toy, which will cost them an additional $2 each.

Required:
To make the project worthwhile, Toy Box Inc. would require a $5,000 profit per month. What level of sales in units and in dollars would be required to reach this target profit? Show all computations.

Assume that the venture is undertaken and an order is placed for 100 X toys. What would be Toy Box's break-even point in units and in sales dollars? Show computations and explain the reasoning behind your answer. You can ignore the fixed cost of $600 for this part.

Reference no: EM13387463

Questions Cloud

Lightning electrics outstanding bond has a 1000 maturity : lightning electrics outstanding bond has a 1000 maturity value and a 4.5 percent coupon rate of interest paid

Determine the key steps in the closing process that provide : identify the key steps in the closing process that provide the most opportunity to make mistakes in processing account

Collin macgibson president of on-time technology products : collin macgibson president of on-time technology products just put you in charge of hiring a several new employees and

Dime a dozen diamonds makes synthetic diamonds by treating : dime a dozen diamonds makes synthetic diamonds by treating carbon. each diamond can be sold for 140.00 the materials

Toy box inc is contemplating expanding their sales of their : toy box inc. is contemplating expanding their sales of their childrens toys. the have an opportunity to stock and sell

According to the regression at about what age does bmi : one of the measures used in studying health and obesity is the body mass index bmi. a bmi measure between 20 and 25

You are working with a company selling building material to : you are working with a company selling building material to builders. you predict the quarterly purchases of customers

Coogly has outstanding preferred stock that pays a : coogly company is attempting to identify its weighted average cost of capital for the coming year and has hired you to

Complete income statement using activity-based costing and : wayne shen established windy city placement service wcps to provide executive counseling and job placement services to

User Account

All Pages