Determine the expected profit of the business, Business Economics

Question

The Borneo Shop imports and sells a popular Blue Ray DVD player. The following current information about the business is available:

          Selling price per player                                $600

          Purchase price of each player                       $400

          Sales commission per player                        $50

          Delivery costs per player                             $10

          Rent                                                           $10 400 per year

          Manager's salary                                         $72 000 per year

          Insurance                                                   $1 600 per year

Required

a. Calculate the number of players the business must sell in a year to break-even.

b. The business expects to sell 1 800 players in the next year. Assuming the selling price per unit and the cost structure of the business remain as they are at present, determine the expected profit of the business for the coming year.

c. The manager is not happy with the projected profit figure. She believes that if the selling price is reduced to $560 per player, $16 000 is spent on advertising during the year, and the sales commission is increased by $10 per player, then the number of players sold will be 2 600.  With supporting calculations, explain whether the manager's plan should be adopted.

d. The business has the option of paying the manager $36 for every player sold rather than her existing salary. At the activity level planned in b. above, should the company proceed with this alternative?

e. Describe how a manager might practically apply cost volume profit analysis in a private or public sector organisation?

Posted Date: 2/16/2013 4:53:28 AM | Location : United States







Related Discussions:- Determine the expected profit of the business, Assignment Help, Ask Question on Determine the expected profit of the business, Get Answer, Expert's Help, Determine the expected profit of the business Discussions

Write discussion on Determine the expected profit of the business
Your posts are moderated
Related Questions
QUESTION Explain the meaning of classical dichotomy, neutrality of money and Walras law. b. "In a Walrasian general equilibrium model with money as a unit of account, only r

(a)  Assume that Purchase Price is equal to initial Market Value (b) Your Market Rent starts at the indicated level and increases by this factor for all of Year 2 and for each y

What is good governance? Governance is fundamentally another word for government and is a necessary precondition for development. It is how governments employ their authority


Do you agree with what Dick Brandon said regarding sex? Do not take this question too seriously! Even though the quotation had a humorous intention, this does highlight a serio

What are the assumptions of dependency theory? The assumptions of dependency theory: Dependency theory extends Marx is theory of surplus value to international relationship

What is an alternative process strategy to the assembly line that Wheeled Coach currently uses?

(a) Using the basic concept of price elasticity of demand for his product, describe how the producer may raise his total revenue. (b) With reference to an initial set of marke

Can anyone type me a paper on the book financial fiasco? I will provide with a link to the book.

QUESTION (a) Compare and contrast the two major transmission channels that characterizes the credit view. (b) Discuss which asset price channel of transmission of monetary p