What is the maximum annual profit

Assignment Help Managerial Accounting
Reference no: EM132972374

Question - Minden Company introduced a new product last year for which it is trying to find an optimal selling price. Marketing studies suggest that the company can increase sales by 5,000 units for each $2 reduction in the selling price. The company's present selling price is $70 per unit, and variable expenses are $40 per unit. Fixed expenses are $540,000 per year. The present annual sales volume (at the $70 selling price) is 15,000 units.

Required - Submit an excel or word file to answer the questions below.

-Create and submit a Contribution Format Income Statement.

-What is the present break-even point in unit sales and in dollar sales?

-Assuming that the marketing studies are correct, what is the maximum annual profit that the company can earn? At how many units and at what selling price per unit would the company generate this profit?

-What would be the break-even point in unit sales and in dollar sales using the selling price you determined in (3) above (e.g., the selling price at the level of maximum profits)? Why is this break-even point different from the break-even point you computed in (2) above?

Reference no: EM132972374

Questions Cloud

Prepare a direct materials purchases budget for august : Prepare a direct materials purchases budget for July, August, and September, showing purchases in units and in dollars for each month and in total.
Improve on business management : Please use all your resources and videos to properly rate them and include how each business can improve on their business management.
Complete the payroll register for Nigel Wallace : During the week ending October 22, 20XX, he worked 40 hours and received $138 in tips. Complete the payroll register for Nigel Wallace
Assess procedures involved in engineering management : Critically assess the environmental impact of construction projects and the use of sustainable methods of construction
What is the maximum annual profit : What is the maximum annual profit that the company can earn? At how many units and at what selling price per unit would the company generate this profit
What impact do assumptions regarding the allocation : Explain What impact do assumptions regarding the allocation of purchase price and method of paying for the acquisition (cash versus stock) have on the amount
Analyse the structure of the uk project management system : Analyse the structure of the UK project management system and possess a critical awareness of the managerial role played by the architectural
Find what are apr and ear : Compute What are APR and EAR? You want to buy a computer. The list price is $1000 but you will get a 15% discount if you pay now.
Is a value of n that will make new portfolio delta and why : Is there a value of n that will make this new portfolio delta neutral? If yes find n. (n should be rounded to the closest integer value.)

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Calculate the profit for each of the four products

Calculate the profit for each of the four products, using outpt and sales value method. Calculate the profit or loss that would occur

  Determine what is the length of the cash conversion cycle

Accounts payable is 40 days, and the average age of inventory is 69 days. Assuming a 365-day year, what is the length of its cash conversion cycle?

  Cost of capital questions-two aftertax cost of debt

Why do we use the overall cost of capital for investment decisions even when only one source of capital will be used?

  Determining cost systems-tioga company

Tioga Company manufactures sophisticated lenses and mirrors used in large optical telescopes. The company is not preparing its annual profit plan.

  Why a bank reconciliation is important for mona

How should Mona treat each of the points? If journal entries are needed, show what they look like. Also, discuss why a bank reconciliation is important for Mona

  Business solutions inc is an accounting firm that is owned

business solutions inc. is an accounting firm that is owned and managed by chad lomax chicago illinois. it is a small

  Prepare a production budget for RC Helicopter

ACC00714 Managerial Accounting Assignment Questions. Prepare a production budget for RC Helicopter for the months July-October

  Find and make a stockholder equity section of balance sheet

Prepare a stockholder's equity section of the balance sheet in proper format using the following information. (Remember treasury stock is common stock)

  How much was undercosted per unit

Which product was under-costed using the traditional allocation of manufacturing overhead, and by how much was it undercosted per unit?

  Describe three roles that played by a management accountant

Describe three roles that are played by a management accountant in environmental management accounting

  Which department has the greatest departmental contribution

Which department has the greatest departmental contribution to overhead and what is the amount contributed?

  Book values and fair values of acquired assets

Martinez Corporation purchased all of the outstanding stock of ABC Inc., paying $ 2,700,000 cash. Martinez assumed all of the liabilities of ABC.

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