Solution-What would expected net income be for both firms

What would expected net income be for both firms

Assignment Help Accounting Basics

Reference no: EM132070349

Question - Answer the following questions:

1. The launch of a new product is under consideration. Its unit variable costs will be £30 and it is estimated that incremental fixed costs of £250,000 will be incurred if production is commenced. Forecast sales are 50,000 units. At what level of price for the new product will the organisation break even? If the actual planned selling price is £48 per unit, what will be the organisation's margin of safety?

2. The following information is about two organisations, A and B.

	Organisation A	Organisation B
	£	£
Fixed costs	60,000	12,000
Variable costs per unit	0.20	0.50
Unit selling price	0.60	0.60
Expected sales levels (units)	160,000	160,000

Which firm has higher operating gearing?
What is the expected net income of both firms?
What would expected net income be for both firms if sales were a) 140,000 units and b) 180,000 units?
Which firm is facing more risk in terms of its current sales predictions?

Be sure to demonstrate your numerical workings.

Reference no: EM132070349

Questions Cloud

Why is important in hr practice : Explain what is meant by this term. Why is this important in HR practice - Draw conclusions regarding the nature of the information

Find research that supports or refutes one of the trends : This week we'll be looking at outsourcing from a business perspective. Please read the 10 Business Outsourcing Trends for 2017 here.

Determine the present value of the bonds payable : Mason Co. issued $680,000 of four-year, 13% bonds with interest payable semiannually, Determine the present value of the bonds payable

Purchasing power parity and international fisher effect : They are purchasing power parity (PPP) and International Fisher Effect (IFE).

What would expected net income be for both firms : What would expected net income be for both firms if sales were a) 140,000 units and b) 180,000 units? Which firm has higher operating gearing

Innovations- minnesota innovation research project : Innovations- Minnesota Innovation Research Project. I found three innovations. I need help with determining the what they learned along the way

Journalize the october transactions and the october : Durhan Company closes its books on its October 31 year-end. Journalize October transactions and the October 31 adjusting entry for accrued interest receivable

What current country would be a good investment for year : What current country would be a good investment for year? I currently was looking India but wanted to see if my answer would be adequate or if anyone

Identify characteristics of isas in substantive detail : Identify, describe and explain in substantive detail the concept/theory, precepts, and building blocks of ISAs and reasons for building ISAs.

User Account

All Pages

What would expected net income be for both firms

Reference no: EM132070349

Reference no: EM132070349

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

How much control does fed have over this longer real rate

Coures:- fundamental accounting principles

Accounting problems

Theory of interest - term structure of interest rates

Write a report on internal controls

Prepare the bank reconciliation for company

Cost-benefit analysis

Theory of interest

Liquidity and profitability

What is the expected risk premium on the portfolio

Simple interest and compound interest

Capm and venture capital

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT