Ponderosa Development Corporation (PDC) is a small realestate developer that builds only one style cottage.The selling price of the cottage is $115,000. The cost per cottageincludes land for $55,000 and lumber, supplies, and othermaterials run another for $28,000. Total labor costs areapproximately $20,000 per cottage. The one salesperson of PDCis paid a commission of $2,000 on the sale of each cottage.Ponderosa leases office space for $2,000 per month. The cost ofsupplies, utilities, and leased equipment runs another $3,000 permonth. PDC has seven permanent office employees whosemonthly salaries are $35,000.a- Calculate the breakeven quantity for the companyb- Develop a one-way data table to examine the effect of thechange in the land price from 50000 to 60000 withincrements of 1000 on the breakeven pointc- Develop a two-way table to examine the change in themonthly salaries and selling price on the breakevenquantity. Use values from 100,000 to 120,000 withincrements of 2,000 for the selling price and values from30,000 to 40,000 with increments of 2000 for the monthlysalaries.

a- Calculate the breakeven quantity for the company b- Develop a one-way data table to examine the effect of the change in the land price from 50000 to 60000 with increments of 1000 on the breakeven point c- Develop a two-way table to examine the change in the monthly salaries and selling price on the breakeven quantity. Use values from 100,000 to 120,000 with increments of 2,000 for the selling price and values from 30,000 to 40,000 with increments of 2000 for the monthly salaries.

a- Calculate the breakeven quantity for the company b- Develop a one-way data table to examine the effect of the change in the land price from 50000 to 60000 with increments of 1000 on the breakeven point c- Develop a two-way table to examine the change in the monthly salaries and selling price on the breakeven quantity. Use values from 100,000 to 120,000 with increments of 2,000 for the selling price and values from 30,000 to 40,000 with increments of 2000 for the monthly salaries.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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