Cost-Volume-Profit (CVP) Analysis and Pricing Decisions Kien Sneakers currently operates in the mens and womens price market
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Question:
Cost-Volume-Profit (CVP) Analysis and Pricing Decisions Kien Sneakers currently operates in the men’s and women’s price market segments. Assume that the company’s income statement for 2022 is as follows:
Required:
- Using this data, calculate the break-even point in volume and value for both men’s and women’s market segments.
- What quantity of men’s sneakers would Kien Sneakers need to sell to generate a profit of €150,000 from that market segment?
- Calculate the company's margin of safety in 2022 in each market segment in percentage terms.
- Kien Sneaker’s marketing team is convinced that a 15% reduction in the selling price of women’s sneakers would cause annual sales to increase by 5,000 units. Use this data to calculate the price elasticity of demand for women’ sneakers and use this to estimate the profit-maximizing price.
Related Book For
Principles of Accounting
ISBN: 978-1133626985
12th edition
Authors: Belverd E. Needles, Marian Powers and Susan V. Crosson
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