What would be the break-even point in units and in swiss

Assignment Help Accounting Basics
Reference no: EM13482205

Problem Break-Even Analysis; Pricing [LO1, LO4, LO6]

Detmer Holdings AG of Zurich, Switzerland, has just introduced a new fashion watch for which the company is trying to find an optimal selling price. Marketing studies suggest that the company can increase sales by 5,000 units for each SFr2 per unit reduction in the selling price. (SFr2 denotes 2 Swiss francs.) The company's present selling price is SFr90 per unit, and variable expenses are SFr60 per unit. Fixed expenses are SFr840,000 per year. The present annual sales volume (at the SFr90 selling price) is 25,000 units.

 

Required:
1.

What is the present yearly net operating income or loss? (Input the amount as a positive value. Omit the "SFr" sign in your response.)

 

   SFr   

 

2.

What is the present break-even point in units and in Swiss franc sales? (Omit the "SFr" sign in your response.)

 



  Break-even point in units   
  Break-even point in Swiss franc sales SFr   

 

3.

Assuming that the marketing studies are correct, what is the maximum profit that the company can earn yearly? At how many units and at what selling price per unit would the company generate this profit? (Omit the "SFr" sign in your response.)

 



  Maximum profit SFr   
  Number of units   
  Selling price SFr   

 

4.

What would be the break-even point in units and in Swiss franc sales using the selling price you determined in (3) above (i.e., the selling price at the level of maximum profits)? (Omit the "SFr" sign in your response.)

 



  Break-even point in units   
  Break-even point in Swiss franc sales SFr   

Reference no: EM13482205

Questions Cloud

Hyde owns several small office buildings in which he rents : jack l. hyde owns several small office buildings in which he rents space to doctors dentists lawyers and other
Prepare an income statement for lawson company for the year : lawson companys accounting system listed the following information for the companys 2007 fiscal year inmillionsaverage
Manufacturing overhead incurred at the puppy meal plant : seven enterprises is a large producer of gourmet per food. during april it produced 147 batches of puppy meal. each
Which of the following would not be categorized as current : which of the following would not be categorized as current assets?1. stocks2. debtors3. plant and machinery4. cash in
What would be the break-even point in units and in swiss : problem break-even analysis pricing lo1 lo4 lo6detmer holdings ag of zurich switzerland has just introduced a new
Prepare a cost of production report for the cutting : prepare a cost of production report for the cutting department of tanner carpet company for december 2012. use the
Using the production schedule develop the direct materials : a company produces doors. the following information was gathered to prepare budgets for the upcoming year beginning
Airporter service company operates scheduled coach service : airporter service company operates scheduled coach service form bostons logan airport to downtown boston and to
Cbs companys manufacturing accounting system uses direct : cbs companys manufacturing accounting system uses direct labor costs to apply overhead to goods in process and finished

Reviews

Write a Review

Accounting Basics Questions & Answers

  Financial and operational plans-enrolment budgets

Let's say that you work in the budgeting office at a university and you have in front of you the expected student enrollment for the upcoming academic year. Discuss a few financial and operational plans that would be dictated by the enrolment bud..

  Gift tax liability under the assumption

What is her 2010 gift tax liability under the assumption that she made the $200,000 of taxable gifts in 1974 instead of 1997?

  Switch connector at its central warehouse

Southeastern Bell stocks a certain switch connector at its central warehouse for supplying field service offices. The yearly demand for these connectors is 15,000 units.

  Describe the difference and similarities between current

describe the difference and similarities between current and long term liabilities. provide examples of

  Balance in the deferred tax liability

The income tax rate for 2009 was 35%, but the enacted rate for years after 2009 is 40%. The balance in the deferred tax liability in the December 31, 2009, balance sheet is:

  Why is the materiality of a transaction

Does the concept of materiality mean that financial statements are not precise, down to the last dollar? Does this concept make financial statements less use full to most users?

  What is the implication to the financial statements

What is an intangible asset? Should all intangible assets be subject to amortization? Explain why or why not. Why are some intangible assets not amortized? What is the implication to the financial statements?

  Roce measures return on assets after the fact arr measures

roce measures return on assets after the fact. arr measures potential returns. why might a finance department be

  Determining transaction fee of underwriting

Sherman Brothers, Inc., sold 4 million shares in its IPO, at a price of $18.50 per share. Management negotiated a fee (the underwriting spread) of 7% on this transaction.

  Federal estate tax

Gift tax returns were filed reporting these gifts. How much of her estate is subject to federal estate tax after considering the estate tax exemption?

  March april and may have been in partnership for a number

march april and may have been in partnership for a number of years. the partners allocateall profits and losses on a

  Choose two models of organizational performance and compare

choose two models of organizational performance and compare and contrast them by evaluating their differences and

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