What is the breakeven sales level for a percent price

Assignment Help Financial Management

Reference no: EM131910018

Question 1 : A company is currently selling 500 units of a product per day at $10 per unit. You can assume that the product's variable costs are constant; they are now at 40 percent of the product's current price.

If the company's sales increase above 600 units per day, an incremental fixed cost of $240 will be incurred.

(a) What is the breakeven sales level for a 12 percent price increase?

(b) What is the breakeven sales level for a 12 percent price decrease?

Question 21 : The manager of a small business is considering lowering the price on his main product for the coming year. If there is any increase in the company's current sales, the manager would have to acquire another delivery truck.

He can obtain a used truck for $10,000. The market value of this truck would be expected to decline by $2,000 per year.

Assume that the manager would earn 6 percent annual interest on the $10,000 if he did not buy the truck.

What is the cost associated with this truck that is relevant to this pricing decision?

Reference no: EM131910018

Questions Cloud

What is the holding period return if the bond is held : If coupons can be reinvested at the YTM, what is the holding period return if the bond is held to maturity?

Cretae comparative condensed income statements : Operating expenses were $130,000, and the company's income tax rate is 40%. Cretae comparative condensed income statements for 2017 under FIFO and LIFO.

Classify the services by the degree of customer contact : Classify the following services by their degree of customer contact (high, medium, or low). Also, determine how much uncertainty the customer introduces.

Contemporary theories that address leadership traits : Your mind map should cover historical theories as well as contemporary theories that address leadership traits, styles of leadership

What is the breakeven sales level for a percent price : The manager of a small business is considering lowering the price on his main product for the coming year.

How do the managerial tasks differ among the services : How do the managerial tasks differ among the services described in question 2? Locate each of the following services on the service delivery system matrix.

Develop more cultural competence : What biases can you identify? What three strategies can you use to develop more cultural competence?

Represent a common population correlation : A researcher has computed two significant Pearson r values from independent random samples

Define a possible service guarantee for each services : Identify the front office and back office services for the following organizations. Could these services be improved by increasing or decreasing the degree.

User Account

All Pages