What price should colgate charge to obtain the same profit

Assignment Help Accounting Basics
Reference no: EM132056460

Problem - Product Pricing: Single Product

Presented is the 2009 contribution income statement of Colgate Products.

Sales (12,000 units)


$1,440,000

Less variable costs



Cost of goods sold

$480,000


Selling and administrative

132,000

(612,000)

Contribution margin


828,000

Less fixed costs



Manufacturing overhead

530,000


Selling and administrative

200,000

(730,000)

Net income


$98,000

During the coming year, Colgate expects an increase in variable manufacturing costs of $6 per unit and in fixed manufacturing costs of $48,000.

(a) If sales for 2010 remain at 12,000 units, what price should Colgate charge to obtain the same profit as last year?

(b) Management believes that sales can be increased to 16,000 units if the selling price is lowered to $105. What would be the excepted profit (or loss) as a result of this action? Use a negative sign with your answer, if appropriate.

(c) After considering the expected increases in costs, what sales volume is needed to earn a profit of $98,000 with a unit selling price of $105?

Reference no: EM132056460

Questions Cloud

Create a culture of ownership and investment : The three most important power sources for a nurse leader, in my opinion, are referent power, expert and reward power. Referent power is important for a nurse.
Prepare a static budget analysis of production cost : The following budgeted and actual volume and cost data are for Marchof this year: Prepare a static (40,000) budget analysis of production costs for March
The spot rate at the time equals today forward rate : What is the cost in dollars of the second 11,500 order if payment is made in 90 days and the spot rate at the time equals today’s 90-day forward rate?
Explain the concepts of gastrointestinal function : What concepts of gastrointestinal function do you believe the students are trying to portray in relation to this statement?
What price should colgate charge to obtain the same profit : Product Pricing: Single Product - If sales for 2010 remain at 12,000 units, what price should Colgate charge to obtain the same profit as last year
What nursing interventions will you include in the plan : What, if any, concerns related to Millie's skin and nutritional status do you have? What nursing interventions will you include in the plan of care to address.
Contrast interest rate parity and purchasing power parity : What are pegged exchange rates ? Compare and contrast interest rate parity and purchasing power parity.
Evaluate efficacy of treatment plans : Evaluate efficacy of treatment plans. Analyze ethical and legal implications related to prescribing antipsychotic therapy to clients across the lifespan.
Determine the tax consequences of the redemption : Determine the tax consequences of the redemption to Tammy and to Broadbill under the following independent circumstances

Reviews

Write a Review

Accounting Basics Questions & Answers

  Prepare tax documentation for individuals

FNSACC502 - Discuss the importance of confirming documentation with clients to ensure that legislative requirement are meet and how long an employee must keep records of work expenses.

  Pash company is considering a special order for 1000 units

pash company is considering a special order for 1000 units to be priced at 8.90. the order would require specialized

  Discuss sam is neither insolvent nor bankrupt

Sam owes Bob $8,000. Bob cancels (forgives) the debt. The cancellation is not a gift, and Sam is neither insolvent nor bankrupt

  Which of the following is a reason to consider

which of the following is a reason to consider international business?a. economies of scale.b. exploit monopolistic

  Worthington company issued 1000000 face value six-year 10

worthington company issued 1000000 face value six-year 10 bonds on 712012 when the market rate of interest was 12.

  Prepare the necessary entries to clear the intangible

dolphin co. organized in 2013 has set up a single account for all intangible assets. the following summary discloses

  Based on the information above im trying to determine the

based on the information above im trying to determine the cost of goods sold. but i have no clue how do so. it seems

  Company is open 7 days a week and has a daily payroll of

1.company is open 7 days a week and has a daily payroll of 1750. employees are paid every friday december 31 is a

  Determining the incremental manufacturing costs

Inventory carrying costs are estimated to be 11% per year. As a result of the layout reorganization, incremental manufacturing costs are projected to:

  What methods are used to allocate the cost of operating

john recently came into a sum of money from an inheritance and is contemplating purchasing a small manufacturing

  Difference in tax-paid between methods

The tax rate is 30% and the FIFO method will result in income before taxes of $5,460. The LIFO method will result in income before taxes of $4,935. What is the difference in tax that would be paid between the two methods?

  How many units would the company have to sell

The company has no beginning or ending inventories. How many units would the company have to sell to attain the target profit of $150,000

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