What is likely to happen to the number of gliders sold

Assignment Help Finance Basics

Reference no: EM13304862

Emerson Ventures is considering producing a new line of hang gliders. The company estimates that variable costs will be $325 per unit and fixed costs will be $330,000 per year.

Solve:

A: Emerson has a pricing policy that dictates that a product's price must be equal to full cost plus 60 percent. To calculate full cost, Emerson must estimate the number of units it will produce and sell in a year. Emerson estimates at the beginning of the year that they will sell 1,500 gliders and sets their price according to that sales and production volume. What is the price?

B: Right after the beginning of the year, the economy takes a dive and Emerson finds that demand for their gliders has fallen drmastically. Emerson revises its sales and production estimates to just 1,000 gliders for the year. According to company policy, what price msut they now set?

C: What is likely to happen to the number of gliders sold if Emerson follows company policy and raises the glider price to that calculated in Part B?

D: Why is setting price by marking up cost inherently circular for a manufacturing firm?

Reference no: EM13304862

Questions Cloud

Is the net torque about the axle due to these forces zero : The rod shown in the drawing is pivoted about an axle passing through its center (solid circle). Is the net torque about the axle due to these forces zero

Is the 12-month u.s. risk-free interest rate above : Is the annualized 6-month U.S. risk-free interest rate above, below, or equal to the British risk-free interest?

Calculate the coefficient of volume expansion : You heat a 507 cm3 sample of a substance from 131 °C to 265 °C, Calculate the coefficient of volume expansion of this substance

Find dimension of rectangular concrete channel to carry flow : Find the dimensions of a rectangular concrete channel to carry a flow of 150 m3/s, with bottom slope 0.015, and mean velocity 10.2 m/s.

What is likely to happen to the number of gliders sold : What is likely to happen to the number of gliders sold if Emerson follows company policy and raises the glider price to that calculated in Part B?

Compute the focal length of the projection lens : The projection lens in a certain slide projector is a single thin lens. A slide 24.3 mm high is to be projected so that its image fills a screen 1.86 m high. Determine the focal length of the projection lens

What would your ideal budget look like : Create a FUTURE budget based on where you want to be in the future. What would your ideal budget look like? What would your housing expenses, cable, electricity, gas, savings amounts, etc all look like?

Determine the force in each member of the truss : Determine the force in member AB Determine the force in member AE Determine the force in member BC Determine the force in member BE Determine the force in member CD

What is the firm value of operations : A firm has 10 million shares outstanding, with a $20 per share market price. The firm has $25 million in extra cash that it plans to use in a stock repurchase; the firm has no other financial investments.

User Account

All Pages