Break-even analysis pricingwhitney sewing and alterations, Ask an Expert

Accounting

Break-Even Analysis; Pricing

Whitney Sewing and Alterations has just introduced a new line of alteration services for men's suits for which the company is trying to determine an optimal selling price. Marketing studies suggest that the company can increase sales by 2,000 units for each $2 per unit reduction in the selling price. The company's current selling price is $45 per unit, and variable expenses are $27 per unit. Fixed expenses are $111,600 per year. The current annual sales volume (at the $45 selling price) is 6,000 units.

Required:

1. What is the current yearly operating income or loss?

2. What is the current break-even point in units and in dollar sales?

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?

www.tex-cetera.com

4. What would be the break-even point in units and in dollar sales using the selling price you determined in (3) above (i.e., the selling price at the level of maximum profits)? Why is this break-even point different from the break-even point you computed in (2) above?

View complete question

Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91626005
Price:- $25

Guranteed 24 Hours Delivery, In Price:- $25

Have any Question?Write your Review or question?

Related Questions in Accounting Basics

Question - cranberry corporation has 3396000 of current

Question - Cranberry Corporation has $3,396,000 of current year taxable income. Use Corporate tax rate schedule. If the current year is a calendar year ending on December 31, 2017, calculate Cranberry's regular income ta ...

Question - at the end of 2016 retained earnings for the

Question - At the end of 2016, retained earnings for the Baker Company was $2,550. Revenue earned by the company in 2016 was $2,800, expenses paid during the period were $1,500, and dividends paid during the period were ...

Question - a summary of labor costs and associated

Question - A summary of labor costs and associated deductions for the month of July follows: Gross PAYG Tax Super Medical Fund Direct labour 40,000 12,000 2,000 200 Indirect labour 8,000 2,400 400 40 48,000 14,400 2, ...

Question to make your decision you should use research and

Question: To make your decision you should use research and clearly lay out the facts and assumptions. You should then use the tools like IRR, NPV, TVM, Ratio Analysis, etc to analyze the facts. Finally, make a closing s ...

Question - in 2018 aman gave his church 50000 in cash he

Question - In 2018 Aman gave his church $50,000 in cash. He also gave his alma mater university another $70,000 of appreciated stock (basis of $18,000). Aman's AGI is $200,000. What is Aman's charitable deduction for 201 ...

Question - dillons camping equipment was burglarized on

Question - Dillon's Camping Equipment was burglarized on 3/10/15. It is unclear how many items were stolen. Dillon and its insurance company are currently working to estimate the dollar value of the stolen goods in order ...

Question - an individual received 70 capital interest in a

Question - An individual received 70% capital interest in a general partnership by contributing investment land purchased 10 years ago for 40000 values 60000 and a personal non business truck purchased 9 months ago for 1 ...

Question - jennifer is a cpa and a single taxpayer using

Question - Jennifer is a CPA and a single taxpayer using the standard deduction. In 2018, her CPA practice generates net income of $162,000 and she has no other income or losses. Jennifer's taxable income before the QBI ...

Question - applying managerial accounting concepts to the

Question - Applying Managerial Accounting Concepts to the Service Industry Many of the concepts in managerial accounting were first developed for the manufacturing environment. Do you think the same concepts, such as var ...

Question - kramer corp reported the following sale and

Question - Kramer Corp. reported the following sale and purchase transactions related to a specific product in January 2017: Date Transaction Quantity Unit Cost Unit Sales Price Jan 01 Beginning inventory 5 $90 Jan 03 Sa ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Accounting Basics Expert