User Account

All Pages

What is its target cost for the proposed industrial line

Assignment Help Accounting Basics
Reference no: EM132931743

Question - Expo Lube is interested in producing and selling an industrial line of oil filters. Market research indicates that wholesale customers are currently willing to pay $8 for similar filters, and that Expo Lube could sell 80,000 units per year at that price.

a. If Expo Lube requires a 23 percent return on sales, what is its target cost for the proposed industrial line of filters?

b. Assume that market research reveals several of Expo Lube's direct competitors are likely to lower the wholesale price of similar filters to $7 per unit. To remain competitive, what will Expo Lube's target cost have to be to maintain a 23 percent return on sales?

c. At a wholesale price of $7, Expo Lube estimates that it can sell 84,000 industrial filters per year instead of 80,000 units. Assuming its target costs are attainable, how much more or less profit per year will the company earn at the $7 wholesale price compared to the initial wholesale price estimate of $8?

Reference no: EM132931743

Questions Cloud

What will be the return on your investment : You have $3,000 that you want to invest in your classmate's start-up business. If all goes according to plan, what will be the return on your investment
Question on animal system-dissection : Using any of the dissection resources provided, use screenshots to illustrate where two or more systems interact and explain the connections between the systems
What the Smith capital balance following the purchase : If the capital balance of Kelly and Lemon are P 40,000 and P 30,000 respectively, what the Smith's capital balance following the purchase
Why does a female with one x chromosome show turner : In humans, one X chromosome in females is inactivated. Why does a female with one X chromosome show Turner syndrome? What is the difference between two X chromo
What is its target cost for the proposed industrial line : If Expo Lube requires a 23 percent return on sales, what is its target cost for the proposed industrial line of filters
Why see different phases of the moon : In a short paragraph, described clearly and in detail why we see different phases of the moon.
Do humans utilize these secondary metabolites : a. What secondary metabolites does Tabernaemontana divaricatetop three produce? (Focus on the prominent metabolites and their major class)
Allocate Greg wages for the week : Allocate Greg's wages for the week between direct labour cost and manufacturing overhead cost. The cause of the overtime is peak production
Consequence for predator populations : Natural selection can operate on predator populations as well as on prey. Suppose that over time trees became covered in lichen and the proportion of light moth

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd