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

Ask an Expert

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

Write your message here..

Related Questions

Capital budgeting and cost of capital, Can I get help with project Can I get help with project

#tFuture Value, You deposit $3,000 in a back account that pays 10% annually... You deposit $3,000 in a back account that pays 10% annually, how much would you have im your account after 5 years?

Cost principle - accounting principle, Cost Principle - Accounting Principl... Cost Principle - Accounting Principle According to this principle all the non-monetary assets of the business are display in the books of accounts at the historical cost that

Why auditors need to attain audit evidence, Why auditors need to attain aud... Why auditors need to attain audit evidence When significant fluctuations/unexpected relationshipsare identified which are inconsistent with  other  relevant  information  or  t

Cash management - managing excess cash, Cash management is about managing ... Cash management is about managing excess cash also. The response of management must depend on whether the surplus is large and how long it is likely to exist. If the balance is

Define a currency futures contract, Q. Define a currency futures contract? ... Q. Define a currency futures contract? A currency futures contract is a standardised contract for the buying or else selling of a specified quantity of currency. It is traded o

Financial decision, Should a company pursue price hike or focus on increasi... Should a company pursue price hike or focus on increasing sales volume

Define hedger - market participants, Define Hedger - Market Participants ... Define Hedger - Market Participants A hedger desires to prevent price variation by locking in a purchase price of the underlying asset by a long position in a futures contract

Definition of financial management, Q. Definition of Financial Management? ... Q. Definition of Financial Management? As-per to Joseph L. Massie 'Financial management is the operational activity of a business that is responsible for obtaining as well as e

Discounted free cash flow model as valuation of commonequity, Explain the d... Explain the difference between the discounted free cash flow model as it is applied to the valuation of common equity and as it is applied to the valuation of complete businesses.