What would the company need in sale dollars

Assignment Help Financial Management

Reference no: EM131953066

1. Integrated Financial. A company is considering a price reduction of 25 percent on its entire line of bicycles. Given the following information, calculate the sales volume (in dollars) needed to obtain a 5 percent profit (as a percent of sales). (Note: unit variable and fixed costs will remain constant)

Previous Year Financials

Sales volume 150,000 units

Sales $18,000,000

Contribution Margin .40 (40%)

Fixed Costs $5,580,000

Net Profits $ 720,000

2. If a company wishes to obtain $100,000 profit on sales this coming year, what level of sales need they obtain given the following previous year expense/price information (which is expected to remain constant for the upcoming year):

Advertising $1,000,000

Selling &Administrative Exp 1,600,000

Plant and Equipment expense 2,000,000

Cost of goods sold 560,000

(Based on volume of 224,000 units)

Selling Price $20.00

3. Using the information in question 2 above, what would the company need in sale dollars to achieve the $100,000 profit level if they reduced price by 8 percent?

Reference no: EM131953066

Questions Cloud

How many months remain on the loan after the extra payment : How many months remain on the loan after the extra payment is made? (Do not round)

The required cash on hand to be invested : Assuming that I have the required cash on hand to be invested.

Compute the qlf for losses incurred as a result : It costs $50 to repair a component in a VCR. Compute the QLF for losses incurred as a result of a deviation from a target setting with a nominal tolerance.

Identify the strengths and weaknesses of each rating : Please describe the differences between the bond ratings. Identify the strengths and weaknesses of each rating.

What would the company need in sale dollars : What would the company need in sale dollars to achieve the $100,000 profit level if they reduced price by 8 percent?

Review problem of six sigma project : Part of a Six Sigma project is to identify X s and Y s. Identify X s and Y s for an athletic director of a major university.

How will risk assessments vary from industry to industry : Where do you think that lean-Six Sigma can be used effectively? How will risk assessments vary from industry to industry?

Why are behavioral processes important : Why are behavioral processes such as brainstorming important for the Taguchi method? How would you cost-benefit a Taguchi experiment?

Their contribution margin be after price reduction : Golden Valley Microwave Foods, Inc. introduced a new product- microwave french fries. What would their contribution margin be after the price reduction?

User Account

All Pages