Calculate the break-even point, Financial Management

A Video Rental store has two employees. The Supervisor is paid $2,200 per month. The other employee, Mark is paid $1,200 per month. In addition, Mark is paid a commission of 20 cents per video that is rented. Other monthly costs are:

• Store rent $1,000 plus 10 cents per rented video

• Depreciation on videos $1,000

• Utilities $400

• Advertising $400

• The rental fee for a movie is $2.00

All answers to the questions below must cite relevant supporting formulas used and show all detailed calculations showing the exact steps on how each of the answers were calculated in Microsoft Word format:

a) Calculate the variable cost per rented video and the total monthly fixed costs.

b) Calculate the break-even point in units and dollars.

c) Calculate the margin of safety and the margin of safety ratio, assuming 5,000 videos are rented in a month.

d) Calculate the rentals required to earn net income of $2,000.

Posted Date: 3/19/2013 1:09:21 AM | Location : United States

Related Discussions:- Calculate the break-even point, Assignment Help, Ask Question on Calculate the break-even point, Get Answer, Expert's Help, Calculate the break-even point Discussions

Write discussion on Calculate the break-even point
Your posts are moderated
Related Questions
What is Planning Internal auditors must plan the audit work so as to perform the audit in an effective manner.There must be sufficient audit programmes in existence which set o

Peak Inc. needs to order Canadian raw materials to use in its production process. The Canadian exporter typically invoices Peak in Canadian dollars. Assume that the current exchang

type of assets for ppt from com student in commerce department in financial management

NPV and Other Criteria Waddington International Inc. has $20 million to invest. It is considering whether to build a new factory in Western Canada. The land and the building wil

The credit term from the supplier is 2/30, net 60. Question: Calculate the effective annual rate if the firm does not take the discount.

Robert Litterman and Jose Scheinkman were the first to study how changes in the shapes of the yield curve affect the total return on the Treasury securities. The histor

It is the third-largest stock exchange by trading size in the United States. In 2008 it was get hold by the NYSE Euronext and turn into the NYSE Amex Equities in 2009. The AMEX is

Goal of Shareholders wealth maximisation Shareholders' wealth maximisation goal gives us the best results since effectsof all the decisions taken by company and its managers ar

What is the investment opportunity schedule (IOS)?  How does it help financial managers make business decisions? The investment opportunity schedule illustrates graphically pro

What are the advantages or benefits of a currency options contract as a hedging tool compared with the forward contract? Answer:  The major advantage of by using options contra