Clem's Antiques has fixed costs of $225,000 per month. Each product has the following identifiable sales...
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Clem's Antiques has fixed costs of $225,000 per month. Each product has the following identifiable sales price, variable material costs and fixed monthly costs, respectively. Fixed Costs 30% 30% 40% Selling Price Variable Costs Clocks: Dinette Sets: Bedroom Suites: $245 $1,165 $1,955 $700 $3,700 $6,500 (1) Calculate the contribution margin for each antique product. og aall (2) Calculate the monthly breakeven in units for each of the antiques. Hint: Divide the fixed costs among the products, and then solve breakeven separately for cach. No need to use the weighted average. (3) For the month, Clem's Antiques expects to sell 620 clocks, 180 dinette sets, and 110 bedroom suites. Prepare an income statement for each antique and a combined income statement for the month. (4) Since the selling of clocks do not contribute substantially to the profits of the company, Clem's Antiques is considering dropping the product from its line of products. Do you believe that this would be in the best interest of the company, why or why not? Support your answer with the appropriate work. (You may want to prepare an income statement) en dop l (5) Clem's Antiques has decided to keep the clocks among its available product lines. The - company feels that if advertising was increased by an additional $12,000 monthly for the clocks, this would result in an increase in the clocks being sold. The company would like to earn $105,000 in profits from the sale of the clocks. Calculate how many additional clocks (over breakeven) for the month must be sold in order to achieve this profit target. Wow e era enr BE (6) Clem's Antiques was ready to submit a sealed quote (bid) for a new customer who desired to purchase 150 clocks during the upcoming year. The sealed quote was for 150 clocks at $650 each, for a total selling price of $97,500. Clem's Antiques gained knowledge that its competitor was also placing a bid with this client. The competitors bid became known to have been for $600 per clock. If Clem's Antiques loses this bid, clock sales will decline, resulting in lower profits, and possibly the layoff of workers will take place. What possibilities would you suggest for Clem's Antiques? And what should the company do and why? Hint: Consider ethics for this question. Clem's Antiques has fixed costs of $225,000 per month. Each product has the following identifiable sales price, variable material costs and fixed monthly costs, respectively. Fixed Costs 30% 30% 40% Selling Price Variable Costs Clocks: Dinette Sets: Bedroom Suites: $245 $1,165 $1,955 $700 $3,700 $6,500 (1) Calculate the contribution margin for each antique product. og aall (2) Calculate the monthly breakeven in units for each of the antiques. Hint: Divide the fixed costs among the products, and then solve breakeven separately for cach. No need to use the weighted average. (3) For the month, Clem's Antiques expects to sell 620 clocks, 180 dinette sets, and 110 bedroom suites. Prepare an income statement for each antique and a combined income statement for the month. (4) Since the selling of clocks do not contribute substantially to the profits of the company, Clem's Antiques is considering dropping the product from its line of products. Do you believe that this would be in the best interest of the company, why or why not? Support your answer with the appropriate work. (You may want to prepare an income statement) en dop l (5) Clem's Antiques has decided to keep the clocks among its available product lines. The - company feels that if advertising was increased by an additional $12,000 monthly for the clocks, this would result in an increase in the clocks being sold. The company would like to earn $105,000 in profits from the sale of the clocks. Calculate how many additional clocks (over breakeven) for the month must be sold in order to achieve this profit target. Wow e era enr BE (6) Clem's Antiques was ready to submit a sealed quote (bid) for a new customer who desired to purchase 150 clocks during the upcoming year. The sealed quote was for 150 clocks at $650 each, for a total selling price of $97,500. Clem's Antiques gained knowledge that its competitor was also placing a bid with this client. The competitors bid became known to have been for $600 per clock. If Clem's Antiques loses this bid, clock sales will decline, resulting in lower profits, and possibly the layoff of workers will take place. What possibilities would you suggest for Clem's Antiques? And what should the company do and why? Hint: Consider ethics for this question.
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Answer Part 1 Particulars Clocks Dinette Sets Bedroom Suites Sales A 700 3700 6500 Variable Cost B 320 1280 1840 Contribution Margin C AB 380 2420 466... View the full answer
Related Book For
Finance for Executives Managing for Value Creation
ISBN: 978-0538751346
4th edition
Authors: Gabriel Hawawini, Claude Viallet
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