What is the full selling price of an umbrella

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Reference no: EM132604983

Questions -

Q1) Gourmet Coffee Company sells a single product. Gourmet Coffee estimates demand and costs at various activity levels as follows:

Units Sold

Price

Total Variable Costs

Fixed Costs

120,000

$48

$3,000,000

$1,000,000

155,000

$45

$3,550,000

$1,000,000

160,000

$40

$4,000,000

$1,000,000

180,000

$35

$4,500,000

$1,000,000

200,000

$30

$5,000,000

$1,000,000

How much profit will Gourmet Coffee have if a price of $45 is charged?

Q2) The Flashy Umbrella Company is considering production of a glow in the dark umbrella that the company would price at a markup of 0.30 above full cost. Management estimates that the variable cost of the umbrella will be $66 per unit and fixed costs per year will be $240,000.

Assuming sales of 1,200 units, what is the full selling price of an umbrella with a 0.30 markup?

Q3) Pottery Company believes it can sell 5,300,000 of its proposed new pots at a price of $10.00 each. There will be $8,000,000 in fixed costs associated with the pots. If the company desires to make a profit $2,000,000 on the pots, what is the target variable cost per pot?

Reference no: EM132604983

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