Achieving a sales profitability

Assignment Help Finance Basics
Reference no: EM132370541

The capacity of an electronic firm is restricted to 8,000 units per month. Overall costs given that capacity is fully used are $ 820,000 If production is 6,000 units, overall costs are $660,000. The products are sold for $ 140 per unit.

Required:

a) The firm aims at achieving a sales profitability (profit/revenue) of 25%. How many units are to be sold to achieve this result?

b) Competitors in the market force the firm to lower prices. Only 85% of overall capacity is available. What sales price is needed if the firm wants to break even?

c) Demand for the firm's product is 10,000 units per month. The management considers an increase in capacity by 25%. Fixed costs would rise by 50% per month. Variable costs, however would decrease by 10%. What are the unit costs in this setting? Calculate profit it products are sold for $ 130 per unit.

Reference no: EM132370541

Questions Cloud

Strip makes a single payment of maturity : The following table shows the prices of sample of Treasury strips. Each strip makes a single payment of maturity.
What will be the price of the 4 year bond : What will be the price of the 4 year bond if its yield increases to 6.90%? Round 2 decimal points
Evaluate each of the hierarchy categories : Abraham Maslow suggested that our behaviors and motivations can be explained by our status of needs - if we are lacking in certain areas, we will consciously.
Calculate your final answer using the financial calculator : What is his annual rate of return? Use Appendix B for an approximate answer, but calculate your final answer using the financial calculator method.
Achieving a sales profitability : The firm aims at achieving a sales profitability (profit/revenue) of 25%. How many units are to be sold to achieve this result?
How can auditor cultivate an appropriate level of scepticism : Federation Business School-BUACC3741-Auditing-Australia-How can auditors cultivate an appropriate level of scepticism in order to do their jobs properly?
Critical evaluation of the nominated website - MCA Australia : COIT20268 - Responsive Web Design (RWD) Assignment, CQ University, Australia. Critical evaluation of the nominated website - MCA Australia
How the klaas and mcclendon research may assist managers : Using Exhibit 7.8 from your text as a framework, specify the reasoning behind the decision to 1) lead and 2) lag the market rate of pay; include relevant.
Identify the challenges confronting human resources managers : Identify the challenges confronting human resources managers within the context of global environment, international and domestic issues, employee compensation.

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd