Break-Even and Target Profit Analysis
The Marbury Stein Shop sells steins from all parts of the world. The owner of the shop, Clint Mar- bury, is thinking of expanding his operations by hiring college students, on a commission basis, to sell steins at the local college. The steins will bear the school emblem.
These steins must be ordered from the manufacturer three months in advance, and because of the unique emblem of each college, they cannot be returned. The steins would cost Marbury $15 each with a minimum order of 200 steins. Any additional steins would have to be ordered in increments of 50.
Because Marbury’s plan would not require any additional facilities, the only costs associated with the project would be the cost of the steins and the cost of sales commissions. The selling price of the steins would be $30 each. Marbury would pay the students a commission of $6 for each stein sold.
1. To make the project worthwhile in terms of his own time, Marbury would require a $7,200 profit for the first six months of the venture. What level of sales in units and dollars would be required to attain this target net operating income? Show all computations.
2. Assume that the venture is undertaken and an order is placed for 200 steins. What would be Marbury’s break-even point in units and in sales dollars? Show computations, and explain the reasoning behind your answer.
Hokey Min's Kleen Karpet cleaned 85 rugs in October, consuming the following resources: Labor: Solvent: Machine Rental: 520 hours at $13 per hour 120 gallons at $8 pe...Jun 14 2020
Which are the reliable websites for downloading torrents? I mean how safe are they in terms of virus and phishing..?Apr 22 2020
An urn contains six tags, of which three are red and three green. Two tags are selected from the urn. If one tag is red and the other is green, then the selected tags are...Aug 05 2020
High electricity costs have made Farmer CorporationAc€?cs chicken-plucking machine economically worthless. Only two machines are available to replace it. The Internationa...May 30 2020
A donor (you) wishes to start an endowment that will provide scholarship money of $40,000 per year beginning in year 5 and continuing indefinitely. If the university earn...Mar 31 2020
f the consumer has Cobb-Douglas preferences, it ispossible for one of the goods to be a Giffen good.c. If a consumer has quasilinear preferences over twogoods, then her c...Mar 17 2020
HAL produces two types of computers: PCs and VAXes. The computers are produced in two locations: New York and Los Angeles. New York can produce up to 800 computers and Lo...Apr 04 2020
A college student has been looking for a new tire for his car and has located the following alternatives: Tire Warranty (months) Price per Tire 12...........................May 15 2020
Consider the circuit shown in Fig. P4(a). i) Find the Phasor currents I, IR, Ic and lL; [8 marks] i) Find the Phasors voltages VR, Vc and V [3 marks] ii) Draw the Phasor ...Jun 04 2020
Predict the impact of high unemployment on the number and nature of entrepreneurial startups. Speculate whether the trend in entrepreneurship would increase or decrease i...Mar 25 2020