What should its target unit variable cost? be

Assignment Help Financial Accounting

Reference no: EM131206441

Base? Line, Inc. makes tennis balls. The company can produce up to? 500,000 cans of balls per year. Current annual production is? 450,000 cans. Annual fixed costs total? $150,000. The variable cost of making and selling each can of balls is? $0.75. Owners expect a? 15% annual return on the? company's $1,000,000 in assets. Assume that Base Line is a price taker in a highly competitive environment. The current market price for a can of balls produced by manufacturers similar to Base Line is ?$1.45

1) If Base Line is unable to reduce its total fixed costs below? $150,000, what should its target unit variable cost? be?

A. $0.75

B. ?$0.71

C. ?$1.35

D. ?$1.45

E. $0.78

2) Base Line has hired a marketing agency to help it gain more control over its sales price. The? agency's fee for developing the advertising campaign is $76,199.Assuming sales volume and other costs will not be affected by the advertising? campaign, what would Base? Line's cost plus price? be?

A. ?$1.59

B. ?$1.42

C. ?$0.92

D. ?$1.45

E. $1.43

Reference no: EM131206441

Questions Cloud

Overtime premium pay-gross pay and the adjusting entry : Pay rate is 19.70 per hour with an overtime rate of 1.5 times for hours over 40 in a workweek. He worked 44 hours. Calculate using the premium approach. Since the company holds back a week, what adjusting entry would they have to make in order to rec..

Sales representative for major office supply business : Suppose that you are a sales representative for a major office supply business and that you get paid a commission plus a yearly bonus if your sales exceed a certain amount. In addition to working full time, you are a student at XXX College majoring i..

What is clydesdale companys profit margin : The Clydesdale Company has sales of $4,500,000. It also has invested assets of $2,000,000 and operating expenses of $3,600,000. The company has established a minimum rate of return of 7%. What is Clydesdale Company's profit margin?

The west regions costs were over or under budget : Budgetary Performance for Cost Center Caroline Company's costs were over budget by $319,000. The company is divided into West and East regions. The East Region's costs were under budget by $47,500. Determine the amount that the West Region's costs we..

What should its target unit variable cost? be : Base? Line, Inc. makes tennis balls. The company can produce up to? 500,000 cans of balls per year. Current annual production is? 450,000 cans. Annual fixed costs total? $150,000. The variable cost of making and selling each can of balls is? $0.75. I..

Partnership sold the securities : On January 2, 2015, Henry, Cabot, and Lodge formed a three-person equal partnership with Henry and Cabot each contributing $100,000 and Lodge contributing securities with a basis to him of $60,000 and a fair market value of $100,000. On February 28, ..

Under check-the-box regulations corporation incorporation : Under the check-the-box regulations a corporation incorporated under the law of any state can

The business owner did not have proper documentation : Here is a scenario from a prior classmate. Her sister owned her own business and could not figure out why she kept getting NSF fees from her bank. She was constantly transferring money and never knew why this was happening. Imagine you are the bank ..

Prepare a cash budget for the first quarter : The results of operations for the Preston Manufacturing Company for the fourth quarter of 2014 were as follows: Sales $ 500,000 Less variable cost of sales 300,000 Contribution margin 200,000 Less fixed production costs $ 100,000 Less fixed selling a..

User Account

All Pages