(b) The company's management would like to hold its fixed costs constant but shift its sales mix so that 60% of its revenue comes from the delivery of non-standardized boxes and the remainder from pouches and small boxes. If this were to occur, what would be the company's break-even sales, and what amount of sales would be provided by each service type? (Use Weighted-Average Contribution Margin Ratio rounded to 2 decimal places e.g. 0.22 and round final answers to O decimal places, e.g. 2,510.) Total break-even sales Sale of mail pouches and small boxes $ Sale of non-standardized boxes %24 %24
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- Keleher Industries manufactures pet doors and sells them directly to the consumer via their web site. The marketing manager believes that if the company invests in new software, they will increase their sales by 10%. The new software will increase fixed costs by $400 per month. Prepare a forecasted contribution margin income statement for Keleher Industries reflecting the new software cost and associated increase in sales. The previous annual statement is as follows:Posters.com is a small Internet retailer of high-quality posters. The company has $1,000,000 in operatingassets and fixed expenses of $150,000 per year. With this level of operating assets and fixed expenses, thecompany can support sales of up to $3,000,000 per year. The company’s contribution margin ratio is 25%,which means that an additional dollar of sales results in additional contribution margin, and net operatingincome, of 25 cents.Required:1. Complete the following table showing the relation between sales and return on investment (ROI).Net Operating AverageSales Income Operating Assets ROI$2,500,000 $475,000 $1,000,000 ?$2,600,000 $ ? $1,000,000 ?$2,700,000 $ ? $1,000,000 ?$2,800,000 $ ? $1,000,000 ?$2,900,000 $ ? $1,000,000 ?$3,000,000 $ ? $1,000,000 ?2. What happens to the company’s return on investment (ROI) as sales increase? Explain.I have found the variable portion (51.9%) but don't understand how to get the fixed portion in dollars.Davis Stores sells clothing in 15 stores located around the southwestern United States. The managers at Davis are considering expanding by opening new stores and are interested in estimating costs in potential new locations. They believe that costs are driven in large part by store volume measured by revenue. The following data were collected from last year’s operations (revenues and costs in thousands of dollars). Store Revenues Costs 101 $4,100 $4,214 102 2,227 2,894 103 5,738 5,181 104 3,982 3,998 105 2,914 3,676 106 4,023 3,319 107 6,894 5,029 108 1,779 2,374 109 5,416 4,688 110 3,228 2,959 111 3,886 4,179 112 4,690 3,200 113 3,552 2,556 114 4,817 4,655 115 2,124 2,986 Required: a. Use the high-low method to estimate the fixed and variable portions of store costs based on revenues. (Round variable cost percentage answer to 1 decimal…
- EBI Solar uses a high-tech process to turn silicon wafers into tinysolar panels. These efficient and inexpensive panels are used topower low-energy, hand-held electronic devices. Last year, EBISolar turned their inventory 4.5 times and had a cost of goodssold of $2.5 million. Assuming 52 business weeks per year: a. Express last year’s average inventory in weeks of supply.b. After several supply chain improvement initiatives, in-ventory investment has dropped across all inventorycategories. While EBI’s cost of goods sold is not expected to change from last year’s level, the value of raw materialshas dropped to $100,500; work-in-process to $25,800; andfinished goods to $16,200. Assuming 52 business weeksper year, express EBI’s current total inventory level inweeks of supply and inventory turns.Cyber Security Systems had sales of 4,600 units at $65 per unit last year. The marketing manager projects a 30 percent increase in unit volume sales this year with a 40 percent price increase. Returned merchandise will represent 5 percent of total sales. What is your net dollar sales projection for this year?The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the company's products is increasing, and management requests assistance from you in determining an economical sales and production mix for the coming year. The company has provided the following data: Demand Next Selling Price year (units) per Unit $16.70 $ 7.50 $26.60 50,000 42,000 35,000 40,000 $ 14.00 325,000 $ 9.60 The following additional information is available: Product Debbie Trish Sarah Mike Sewing kit a. The company's plant has a capacity of 130,000 direct labor-hours per year on a single-shift basis. The company's present employees and equipment can produce all five products. b. The direct labor rate of $16 per hour is expected to remain unchanged during the coming year. c. Fixed manufacturing costs total $520,000 per year. Variable overhead costs are $2 per direct labor-hour. d. All of the company's nonmanufacturing costs are fixed. e. The company's finished goods inventory is negligible and…
- Crawford’s Books and Things has a traditional bookstore housed downtown Charlotte. The store has been there forty years, and many customers love the fact that they can hold the books in their hands and browse the offerings. Crawford’s just started an online book division for people who like to order books online. EVA for the Charlotte store is about $13 million, while EVA for the online division shows a value of –$2.2 million. Which measures for the customer and internal processes dimensions of the balanced scorecard would be appropriate for the online division? A. customer measure might be the percent of customers making repeat purchases; an internal process measure might be the number of times per month that the website is down. B. customer measure might be time to deliver books; an internal process measure might be the percentage of website visits that translate into sales. C. customer measure might be the number of new customers who come via recommendations from existing ones;…Use the following information to answer questions 19 through 30: Currently, OET Corporation sells 350,000 units of widgets a month at a price of $21 a unit. The company currently has a net 30 credit policy. Mr. Ent, the company's financial manager, is evaluating a new credit policy of net 60 for the company. The marketing manager thinks that sales would increase by 10,000 units per month if the company were to switch to the new credit policy. The APR for OET is 13% compounded monthly, and its variable cost per widget is $12. Ignore taxes. Tomorrow, Mr. Ent will be making a presentation on the new proposed credit policy to the CEO of OET. He will be expected to provide answers to the following questions Describe how you would calculate the net present value of the proposed credit policy switch.Sunland Candy Company is a wholesale distributor of candy. The company services grocers, convenience stores, and drugstores in a large metropolitan area. Sunland Candy Company has achieved small but steady growth in sales over the past few years, but costs have also been increasing. The company is formulating its plans for the coming fiscal year. The following data were used to project the current year's after-tax operating income of $213,312: Average selling price Average variable costs Cost of candy Selling expenses Total Annual fixed costs Selling Administrative Total (c) $8.00 per box $4.00 per box 0.80 per box $4.80 per box $300,800 631,600 $932,400 The expected annual sales volume (733,200 boxes) is $5,865,600 and the tax rate is 40%. Candy manufacturers have announced that they will increase the prices of their products by an average of 15% in the coming year because of increases in raw material (sugar, cocoa, peanuts, and so on) and labour costs. Sunland Candy Company expects…
- Computate Inc. produces microprocessors for laptops. Last year, the company recognized revenues of $4,000,000. Total costs for the period were $2,000,000, of which $500,000 were fixed. If sales were to increase by $150,000, by how much would Computate’s operating income increase?The Food division of Garcia Company reports the following for the current year. Sales Cost of goods sold Gross profit Expenses Income Garcia wants to achieve at least a 10% profit margin next year. Two alternative strategies are proposed. Strategy 1: Increase advertising expenses by $225,000. The company expects this to increase sales by $660,000. Cost of goods sold will not change. Strategy 2: Develop a more efficient manufacturing process. This will decrease cost of goods sold by $127,000. a. For each strategy, compute the profit margin expected for next year. b. Which strategy should Garcia choose based on expected profit margin? Complete this question by entering your answers in the tabs below. Required 1 $ 4,180,000 2,860,000 1,320,000 1,029,000 $ 291,000 Required Strategy 1 Strategy 2 For each strategy, compute the profit margin expected for next year. Note: Round your answers to one decimal place. Profit margin % %Reliant Chairs sells designer seating to consumers through retail outlets. Total industry sales for the market last year were $128 million, with Reliant’s sales representing 6.5% of that total. Contribution margin is 18%. Reliant’s sales force calls on retail outlets and each sales rep earns $45,500 per year, plus 2.5% commission on all sales. Retailers receive a 38% margin on selling price and generate average revenue of $12,000 per outlet for Reliant. The marketing manager has suggested increasing customer advertising by $200,000. By how much would dollar sales need to increase to break even on this expenditure? What increase in overall market share does this represent? Another suggestion is to hire 3 more sales representatives to gain new consumer retail accounts. How many new retail outlets would be necessary to break even on the increased cost of adding the 3 sales reps? A final suggestion is to make a 10% price reduction across the board. By how much would dollar sales need to…