What is the break-even price for the toy truck

Assignment Help Accounting Basics
Reference no: EM133035360

Question - Last year, a toy manufacturer introduced a new toy truck that was a huge success. The company invested $2 million for a plastic injection molding machine and $100,000 in plastic injection molds specifically for the toy. Labor and the cost of materials necessary to make each truck is about $3, the company's total revenue is $6M. This year, a competitor has developed a similar toy that has significantly reduced demand for the toy truck. Now, the original manufacturer is deciding whether they should continue production of the toy truck. If the estimated demand is 100,000 trucks.

a. How much is the unit cost?

b. What is the break-even price for the toy truck?

c. How much is the selling price for the company to earn pure profit?

d. Should you shut down, or continue the operation? Justify your answer.

Reference no: EM133035360

Questions Cloud

How will you motivate your employees : 1. As a manager, how will you motivate your employees? 2. Who is a good motivator in sports or business? Why?
Principles of the un global compact : The purpose of this reflection is to encourage you to think about your contribution to IDLE, your team and any learning challenges experienced during the sessio
MGT605 Business Capstone Project Assignment : MGT605 Business Capstone Project Assignment Help and Solution, Laureate International Universities - Assessment Writing Service
Differences between branch captive and agency captive : What are the differences between Branch Captive and Agency Captive?
What is the break-even price for the toy truck : What is the break-even price for the toy truck? Should you shut down, or continue the operation? Justify your answer
What is a competitive advantage : What is a competitive advantage? How does marketing contribute to the creation of a competitive advantage?
Greater role in the national discussion : Given the severity of the threat, the issue should play a far greater role in the national discussion.
How does this compare to the current reorder policy : If the restaurant uses the EOQ model, how many numbers of orders per year? How does this compare to the current reorder policy
Discuss the premise of tq : 1. Discuss the premise of TQ. Then, design a TQ initiative for a company of your choosing, outlining steps that will provide internal and external support for y

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.

  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!

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