# Question

Andrew Gutierrez is evaluating a business opportunity to sell grooming kits at dog shows. Andrew can buy the grooming kits at a wholesale cost of $ 33 per set. He plans to sell the grooming kits for $ 73 per set. He estimates fixed costs such as travel costs, booth rental cost, and lodging to be $ 720 per dog show.

Requirements

1. Determine the number of grooming kits Andrew must sell per show to breakeven.

2. Assume Andrew wants to earn a profit of $ 1,080 per show.

a. Determine the sales volume in units necessary to earn the desired profit.

b. Determine the sales volume in dollars necessary to earn the desired profit.

c. Using the contribution margin format, prepare an income statement ( condensed version) to confirm your answers to parts a and b.

3. Determine the margin of safety between the sales volume at the breakeven point and the sales volume required to earn the desired profit. Determine the margin of safety in both sales dollars, units, and as a percentage.

Requirements

1. Determine the number of grooming kits Andrew must sell per show to breakeven.

2. Assume Andrew wants to earn a profit of $ 1,080 per show.

a. Determine the sales volume in units necessary to earn the desired profit.

b. Determine the sales volume in dollars necessary to earn the desired profit.

c. Using the contribution margin format, prepare an income statement ( condensed version) to confirm your answers to parts a and b.

3. Determine the margin of safety between the sales volume at the breakeven point and the sales volume required to earn the desired profit. Determine the margin of safety in both sales dollars, units, and as a percentage.

## Answer to relevant Questions

Juda Company manufactures and sells a single product. The company’s sales and expenses for last year follow:Requirements 1. Fill in the missing numbers in the table. Use the table to answer the following questions: a. ...Market Time Investors is opening an office in Green Bay, Wisconsin. Fixed monthly expenses are office rent ($ 2,700), depreciation on office furniture ($ 280), utilities ($ 250), special telephone lines ($ 600), a connection ...1. Define breakeven point. Why is the breakeven point important to managers? 2. Describe four different ways cost- volume- profit analysis could be useful to management. 3. The purchasing manager for Rockwell Fashion Bags ...The following is a partial performance report for a revenue center for the Eastern Division of Peony Restaurants.Fill in the missing amounts. Indicate whether each variance is favorable (F) or unfavorable(U).Complete the following statements with one of the terms listed here. You may use a term more than once. Some terms may not be used at all.a. A( n) _____ is a budget prepared for a different volume level than that which was ...Post your question

0