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
Why do you think closed-end country funds frequently trade at a premium or discount? Answer:  CECFs (closed-end country funds) trade at a premium or discount since capital market


Return on Investment (ROI) In accounting it is a measure of the earning power of an industries asset. A high return on investments is desirable. ROI is widely described as net

What is the relationship between a bond's market price and its promised yield to maturity?  Explain. A bond's market price reckon on its yield to maturity (YTM).  When a bond h

define ratio analysis. explain the advantages of ratio analysis

Q. How Amount of financing affecting cost of capital? Amount of financing as the financing require of the firm become larger , the weighted cost of capital increased several re

Considering the following information, what is the price of the share as per Gordon’s Model? Details of the Company Net sales Rs.120 lakhs Net profit margin 12.5% Outstandin

Question 1 Describe the process involved in accounting. What are the objectives of accounting? Question 2 Briefly explain the role of management accounting. Also expalin the

A floater where the coupon rate is computed as a fraction of the reference rate plus a quoted margin, are known as a de-leveraged floater. The general formula for this