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
Q. Re-order point - technique of inventory management? Re-order point: - The re-order point is that stock level at which an order should be placed. Mutually the excessive and i

What is the Trade payable days (turnover) Year-end trade payables/Credit purchases (or cost of sales)x   365days This is the length of time taken to pay suppliers. The rat

The securing of the working capital needed for the support of raises in accounts receivable and inventory related with an organizations initial expansion time.

Market mechanism: Market mechanism is a term from economics denoting to the use of money exchanged by sellers and buyers with an open and understood system of time and value t

Entity A is significantly smaller than B in terms of revenue and would not impact LOP's revenue to the same extent. However A earns a noticeably better gross profit margin at 26% a

Settlement of the Index Options Contract In the index options contract, the premium to be paid or to be received is calculated for each CM after netting the positions at the en

Explain learning outcomes of financial management By the end of this subject guide as well as having done the relevant readings and activities you should be able to

suggestion regarding credit limit. should it be approved or not what should be the amount of credit limit that electronics give to booth plastics

Illustration Consider a Rs.1,000 par value bond whose current market price is Rs.850. The bond carries a coupon rate of 8% and has a maturity period of 9 years. Wha

Why do businesses spend time, effort, and money to produce forecasts?  Explain. Businesses succeed or fail relies on how well organized they are to deal with the situations they