What is the impact on operating profit

Assignment Help Accounting Basics
Reference no: EM131795999

Question - Cambridge, Inc. is considering the introduction of a new calculator with the following price and cost characteristics:

Sales price $18 each

Variable Costs $10 each

Fixed costs 20,000 per month

Assume that the projected number of units sold for the year is 7,000. Consider (b) (c) and (d) independently of each other.

Required:

A. What will the operating profit be?

B. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent?

C. What is the impact on operating profit if variable cost per unit decrease by 10 percent? increase by 20?

D. Suppose that fixed costs for the year are 10 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much?

Reference no: EM131795999

Questions Cloud

Different recipes for chocolate fudge : Rachel is comparing three different recipes for chocolate fudge. She asks her friends to taste her fudge and rate how delicious it is. Her results are provided
Prepare the sales revenues section of the income statement : Maulder Company provides the following information for the month ended October 31, 2010: Prepare the sales revenues section of the income statement
Discuss about the price of a European put option : A certain stock pays no dividends and is priced by the market at $19. A European call with three months to expiration and an exercise price of $20 is priced.
What is the probability a random families : What is the probability a random families bill is more than $550 25.12% 74.86% 15.26% 24.86 %?
What is the impact on operating profit : Assume that the projected number of units sold for the year is 7,000. What is the impact on operating profit
What will be the percent change in net income : Chad Gates owns Strings Attached, a store that sells guitars. The company has $5 million in current annual sales, fixed operating costs of $300,000.
Pick out a pair for your business trip : You reach into the drawer in the dark and randomly pick out a pair for your business trip. What is the probability your pick out 1 yellow pair?
Prepare schedule k-one for ryan ross 15520 w earlson street : Prepare Form 1065, pages 1, 4, and 5, for ROCK the Ages LLC. Prepare Schedule K-1 for Ryan Ross, 15520 W. Earlson Street, Pacific Palisades, CA 90272.
Achievement test for high school graduates : The reported scores on a nationally standardized achievement test for high school graduates have a mean of 500 with the standard deviation of 100.

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