Reference no: EM133074047
Question - Manchester LTD manufactures FIFA computer games. Last year Manchester sold 5000 games at $500 each. The variable cost of each game was $300, and the firms fixed cost amounted to $500,000 per year.
In an attempt to improve its product, the company is considering replacing a component part that has a cost of $100 with a new and improved part costing $150 per unit in the coming year.
Required -
a) What was Manchester's contribution margin ratio last year?
b) What was Manchester's break-even point in number of units last year?
c) What will the new break-even point in number of units be if the suggested changes is not made in the coming year, however, fixed cost increase by 10%.
d) How many computer games would have had to sell last year to earn a target net profit of $1,000,000?
e) If Manchester holds the sales price constant and makes the suggested changes, how many units must be sold in the coming year to earn a target net profit of $1,000,000?
|
Conflict of goals between firm managers and shareholders
: -State and describe the concept that leads to "conflict of goals between a firm's managers and its shareholders. Give a modern-day example of this concept, and
|
|
What the estimated total cash collections by fresplanade co
: What the estimated total cash collections by Fresplanade Co. during October from accounts receivable
|
|
What is the value of the common stock
: As a constant growth rate of 4 %, what is the value of the common stock of the investors require a 15 % rate of return?
|
|
Determine the values for e and d
: Toyota Motor Company is expanding the production of their gas-electric hybrid drive systems and plans to shift production in the United States
|
|
What was manchester contribution margin ratio last year
: Manchester LTD manufactures FIFA computer games. Last year Manchester sold 5000 games at $500 each. What was Manchester contribution margin ratio last year
|
|
Media Analysis - The Power of Art
: Media Analysis - The Power of Art - Thesis support, thesis development, Evaluation of chosen critique, Use of second critique, use of examples and logic
|
|
Discussion of the impact of economic environment
: The firm imports high quality wool to Britain from foreign suppliers located in Australiaand the New Zealand.
|
|
Find net present value of investment opportunity
: a) What is the payback period, accounting rate of return, internal rate of return, and net present value of this investment opportunity?
|
|
What will be the balance on the loan at the end of year one
: A loan of $174,000 at 2.62% compounded quarterly was to be settled with month-end payments of $7,250. What will be the balance on the loan at the end of year 1
|