User Account

All Pages

What would be the new annual profit or loss

Assignment Help Managerial Accounting
Reference no: EM133093250

Question - HMI Inc. is suffering from effects of increased competition for its product, a lawn mower that is sold is discount stores. The following table shows the results of its operations for 2020:

Sales (12,500 units @ $84) $1,050,000

Variable Cost (12,500 units @ $63) 787,500

Contribution Margin 262,500

Fixed Costs 296,100

Operating Profit (Loss) ($33,600)

Required -

1. Compute the break - even point in both units and dollars.

2. Compute the Contribution Margin ratio at the 12,500 units.

3. What would be the required sales in units and dollars to generate a target profit of $30,000.

4. The manager believes that a $60,000 increase in advertising would result in a $200,000 increase in annual sales. If this change is implemented, what would be the new annual profit or loss.

5. A 10% reduction in price per unit and an increase in advertising of $40,000 would cause the sales in unit to increase by 25% - if this change is implemented what would be the new operating profit (loss).

Reference no: EM133093250

Questions Cloud

Formal qualities of italian neorealism : 1. What was distinctive about the formal qualities of Italian Neorealism?
What is the standard cost of direct materials for a wreath : Each wreath requires 1.75 yards of greenery priced at $3.82 per yard and ribbon costing $1.22 per wreath. What is the standard cost of direct materials
Reasons of satisfaction and dissatisfaction : Imagine you work for a market research company that prepares ad-hoc surveys to help business deep dive on customer satisfaction issues, challenges and opportuni
National culture impact performance management systems : List nine ways of gaining access to external knowledge. How can national culture impact performance management systems?
What would be the new annual profit or loss : The manager believes that a $60,000 increase in advertising would result in a $200,000 increase in annual sales. What would be the new annual profit or loss
Evaluate the different forecasting approaches : Consider the forecasting approaches identified in the spreadsheets supplied in this segment. These approaches include naive, moving average, exponential smoothi
Components of the canadian financial system : List the three components of the Canadian financial system and explain how it is regulated.
Who should participated in the setting of the new standards : Who should have participated in the setting of the new standards? How would their participation have improved the process
Expansion opportunity research : Select a product and a country to which to sell that product. Starbucks is the product. Canada is the country

Reviews

Write a Review

Managerial Accounting Questions & Answers

  How calculate the net present value of the project

The cost of capital is 10% where its cumulative discount (annuity) factor for six years at 10% is 4.355. Calculate the Net Present Value of this project.

  How could be used to manage an organisation relationships

How do you think that information, such as CSR-related information, could be used to manage an organisation's relationships with its powerful stakeholders?

  Most important role of human resource managers

What is the most important role of Human Resource managers? Should HR professionals be the "voice" for employees or the "spokesperson" for managers?

  What will be total net income if the line is dropped

Assume all of the fixed expenses for the hard rubber line are avoidable. What will be total net income if the line is dropped

  What is the maximum overcharge for an item in thestudy

The manager doesn't believe, What is the maximum overcharge for an item in this study? And, what is the maximum undercharge for an item in this study?

  Find what direct materials quantity variance for the month

Find what the direct materials quantity variance for the month was? During the latest month, the company purchased and used 47,000 pounds

  What the raw materials quantity variance for the month

The direct materials purchases variance is computed when the materials are purchased. What the raw materials quantity variance for the month

  What ajax would estimate fixed costs as

What Ajax would estimate fixed costs as? Ajax uses the high-low method of estimating costs. Ajax had total costs of $46,940 at its lowest level

  What is the company contribution margin ratio

The company has no beginning or ending inventories. A total of 20,000 units were produced and sold last month. What is the company contribution margin ratio

  Compute a Cash Budget for November and December

The company's operating expenses are estimated to be 40% of sales and are paid as incurred. Compute a Cash Budget for November and December

  What will be the likely effect on desired ending inventory

What will be the likely effect on the desired ending inventory of finished product? A company has had stable sales and production for several years.

  Complete a cash disbursement budget

Please complete a cash disbursement budget (for direct materials) for the first quarter of the year. What is the accounts payable balance as at March 31st

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