Problem related to drop in sales

Reference no: EM13128692

Company sells a single product at $20 per unit. Sales- 100,000, variable costs $800,000, fixed costs $400,000 If a $4 drop in selling price will boost unit sales by 20% the company will experience:

a. no change because a 20% drop in sales is balanced by a 20% increase in volume.

b. an $80,000 drop in profitability

c. a $240,000 drop in profitability

d a $400,000 drop in profitability

e. a change in profitability other than those above

Reference no: EM13128692

Questions Cloud

Find statistics to know to expose misleading claim : What facts and/or statistics would you need to know to expose this misleading claim? The larger the sample, the more reliable the results." Do you agree or disagree with this statement? Explain.

Letter of transmittal : Letter of Transmittal Write two different letters of transmittal that can be used in your Formal Proposal in Unit VIII. Pick two separate problems in your community, and imagine that your business is well positioned to provide a solution to that issu..

Define the solubility of silver phosphate in pure water : The solubility of silver phosphate in pure water and Na3PO4, Silver Phosphate, Ag3PO4, is an ionic compound with a solubility product constant Ksp of 206 x 10 ^ - 18.

Prepare the journal entry required by frozen delight : Frozen Delight, Inc. charges an initial franchise fee of $75,000 for the right to operate as a franchisee of Frozen Delight. Of this amount, $25,000 is collected immediately.

Problem related to drop in sales : Company sells a single product at $20 per unit. Sales- 100,000, variable costs $800,000, fixed costs $400,000 If a $4 drop in selling price will boost unit sales by 20% the company will experience:

Functions and euler method : Find the solution of the following equations: Use the Euler method with the step size shown to advance four steps from the given initial condition with the given differential equation:

How to prepare the company entries to record : Gordeeva Corporation began selling goods on the installment basis on January 1, 2010. During 2010, Gordeeva had installment sales of $179,000; cash collections of $77,300; cost of installment sales of $121,720.

Confidence interval-population proportion of positive drug : Construct a 95 percent confidence interval for the population proportion of positive drug tests. Why may you assume that this is a normal distribution?

What is the vapor pressure depression of a solution : The vapor pressure of pure water at 70°C is 240. mm Hg. What is the vapor pressure depression of a solution of 150. g of the antifreeze ethylene glycol, C2H6O2, a nonvolatile compound, in 215 g of water?

User Account

All Pages