User Account

All Pages

What is the effect on the breakeven point

Assignment Help Managerial Accounting
Reference no: EM133031168

Problem - Mody Motors is a small bike dealership. On average, it sells a bike for $2,900, which it purchases from the manufacturer for $2,500. Each month, Mody Motors pays $65,000 in rent and utilities and $75,000 for salespeople's salaries. In addition to their salaries, salespeople are paid a commission of $60 for each bike they sell. Mody Motors also spends $13,000 each month for local advertisements.

Required -

1- How many bikes must Mody Motors sell each month to break even?

2- How many bikes must be sold each month to reach the target monthly net income of $68,000?

3- Calculate the margin of safety assuming that budgeted monthly sales is $1,450,000 from selling 500 bikes.

4- Assume that Mody Motors finds a new supplier with a lower purchase price per pair. What is the effect on the breakeven point?

5- What are the key assumptions of CVP analysis?

Reference no: EM133031168

Questions Cloud

What led capitalism to diverge from adam smith ideals : "Adam Smith's teachings posit that capitalism is intended to be a moral system. Smith believed that this was indeed the best economic system to protect individu
Calculate the project npv using a discount rate : Thus, in year 7 the investment cash inflow totals $4,500,000. Calculate the project's NPV using a discount rate of 10 percent
Why is moral reasoning important in business : I. Why is Moral Reasoning Important in Business?
Imaging system for examination of the human breast : For the following statistical investigations suggest an appropriate graphical display for the data and briefly explain your choice.
What is the effect on the breakeven point : Assume that Mody Motors finds a new supplier with a lower purchase price per pair. What is the effect on the breakeven point
What is the probability that a call will receive a busy : Mid-West Publishing Company publishes college textbooks. The company operates an 800 telephone number whereby potential adopters can ask questions about forthco
How to develop a contract statement of work : Question 1: Describe the buyer's contract management process and its value to the organization.
Show all calculation for the inventory balance : Show all calculation for the inventory balance that Temple would report on its year-end balance sheets for 2020 and 2021, using the dollar-value LIFO method
Discuss the advantages and disadvantages to google : Discuss the advantages and disadvantages to Google of its conversion to a public limited company in 2004

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Calculate contribution margin and selling price per unit

Calculate: Contribution Margin, Selling price per unit, Variable labor cost per unit, Variable purchases cost per unit and Breakeven point in units and dollars

  Which would be a trend in the demographic? environment

Which would be a trend in demographic? environment? values have become less important for consumer decision making./ Americans, on? average, are getting older.

  How can annual budget function as a form of internal control

Why do companies use sequential prenumbering for documents such as checks, sales invoices, and purchase orders? How can an annual budget function as a form of internal control?

  Determine the equivalent units and the assignment of costs

Determine the equivalent units and the assignment of costs to units transferred-out and inventories using the Weighted-Average Costing method

  What is the net present value of this investment

What is the net present value (NPV) of this investment if the cost of capital is 7%? Should the firm undertake the project

  Exploitation of labor and resources

What is meant by the concept of fair trade referencing to the exploitation of labor and resources?

  Compute the updated current ratio after each transaction

Compute the updated current ratio after each transaction, by showing the cumulative effects of transactions. Good Sports, Inc., is a private full-line sporting.

  Find the payback period for the equipment

The equipment has an estimated life of 8 years, no estimated salvage life, and a required rate of return is 6%. Find the payback period for the equipment

  Calculate the equivalent units of production for conversion

The ending work in process units are 60% complete as to conversion costs. Calculate the equivalent units of production for materials and conversion costs.

  How to make cost of good manufacture statement

How to Make Cost of Good Manufacture Statement? The Black Pepper Corporation desires to classify the cost and provides you the figure of trial balance

  Find the total amount of product cost incurred to make

For the financial report purpose, the total amount of product cost incurred to make 6.400 units is closet to.Dake corporation's relevant range of activity

  What last-in first-out method is not permitted under ifrs

What last-in, first-out method is not permitted under the IFRS, however if the last-in, first-out periodic method is applied, the value of ending inventory is?

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