What is the break-even point in units for the company

Assignment Help Finance Basics
Reference no: EM13298534

Rocky Mount Metals Company manufactures an assortment of wood-burning stoves. The average selling price for the various units is $500. The associated variable cost is $350 per unit. Fixed costs for the firm average $180,000 annually.

a. What is the break-even point in units for the company?
b. What is the dollar sales volume the firm must achieve to reach the break-even point?
c. What is the degree of operating leverage for a production and sales level of 5,000 units for the firm? (Calculate to three decimal places.)
d. What will be the projected effect on earnings before interest and taxes if the firm's sales level should increase by 20 percent from the volume noted in part c?

 

Reference no: EM13298534

Questions Cloud

Calculate how fast are you moving with respect to the moon : As you zip through space in your PPS (personal propulsion suit), your pulse rate, as you count it, is 117 bpm, How fast are you moving with respect to the Moon
Explain out of what will you construct your calorimeters : Out of what will you construct your calorimeters? please answers have to be related to chemistry and specifically to this experiment.
What is the relationship between p2 and p1 : Pn = price at time n; Dn = dividend at time n; Yn = Earnings in period n; r = retention ratio = 1-Dn/Yn = dividend payout ratio.
What lifetime do you observe for the muon : The elementary particle called a muon is unstable and decays after 2.20 ?s, as observed in its rest frame, What lifetime do you observe for the muon
What is the break-even point in units for the company : Rocky Mount Metals Company manufactures an assortment of wood-burning stoves. The average selling price for the various units is $500. The associated variable cost is $350 per unit. Fixed costs for the firm average $180,000 annually.
Explain what are the necessary features of a calorimeters : you will need to construct a calorimeter to complete this project. what are the necessary features of a calorimeters. please answers have to be related to chemistry and specifically to this experiment.
What is the current value of chambers common stock : The last divended,just paid, was $2.20. If divedends are expected to grow by the company's internal growth rate indefinately, what is the current value of Chambers common stock if it is required is 20%.
What are the explanations for ipo being underpriced : What are the explanations for IPO's being underpriced, since one of the characteristics is that they tend to be underpriced.
Prepare the companys direct labor budget : Prepare the companys direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. (Omit the "$" sign i..

Reviews

Write a Review

Finance Basics Questions & Answers

  What are the cost savings to each party

whereas Virgin can borrow dollars at 8% and pounds at 8.5% and What range of interest rates would make this swap attractive to both parties and what are the cost savings to each party?

  What is the mirr using the discounted approach

The Taxi Co. is evaluating a project with the following cash flows: Year Cash Flow 0 -$13,400 1 6,100 2 6,800 3 6,500 4 5,400 5 -5,900 The company uses an 8 percent interest rate on all of its projects. What is the MIRR using the discounted approa..

  Capm framework

MMB has common stock has a beta of 1.5. A security analyst forecasts an expected return of 15 percent over the next year. The market risk premium is 8 percent and the risk free rate is 4 percent.

  Compute bay state weighted cost of capital

A partial balance sheet is shown below: Current liabilities $ 300,000 Long-term debt 1,000,000 Common stock at $1 par 100,000 Paid in capital 900,000 Retained earnings 3,000,000 Total liabilities and stockholders' equity $5,300,000.

  What is the approximate and the exact real rate of interest

If Treasury bills are currently paying 6.55 percent and the inflation rate is 1.2 percent, what is the approximate and the exact real rate of interest?

  What is the best estate planning strategy

What is the best estate planning strategy when creating a trust for a married couple who have invested in a franchise worth $8,000,000 and growing? The couple also has kids together. Should they create a will or trust?

  Financial management and time value of money

How are compounding and discounting related? Explain time value of money.

  What is its stock price

ABC Inc. is expected to pay $1.51 dividend at the end of the year and is expected to pay the same amount of dividend forever. What is its stock price, assuming it has a required return of the stock is 9%? Please show work.

  Calculate the present values of investment using future

Calculate the present values of investment using future values investments returns

  Calculate the terminal value of the tax shield

Calculate the terminal value of the tax shield given the following information. Assume we are calculating it for the next year (that is, assume there is no planning period, just a terminal value). The tax rate is 30%. Debt will be $111 million.

  Find the unpaid balance

You have taken an amortized loan at 8.7% for 6 years to pay off your new car, which costs $12,000. After 5 years of monthly payments of $214.52, you decide to pay off the loan. Find the unpaid balance. Assume monthly payments.

  What is depreciation

What is depreciation and why is it considered a noncash item? Give several examples.

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