Question: Show me the steps to solve 1 . David Tan, sales director, of Pub s Toy Ltd , negotiated with a new customer on the
Show me the steps to solve
David Tan, sales director, of Pubs Toy Ltd negotiated with a new customer on the volume and selling price of its popular product Monster Craz. David has been informed of the costs of manufacturing the product variable production cost $ each and fixed production overhead $ for the expected volume between units and units. Selling and administrative variable and fixed expenses are $ per unit and $ for the same expected volume range. David expected to sell units of Monster Craz. How much is the minimum price for the deal, if a minimum targeted profit of $ is expected?
Boring is the one of the largest commercial airplane manufacturers. In it began development of the VIII, a passenger plane with a range up to miles. First deliveries will take place in The price will be about US$ million per plane.
Assume the annual fixed costs for the VIII are US$ million and its variable cost per VIII is US$ million.
Required:
a How many planes does Boring need to sell in order to breakeven?
b If Boring managed to clinch contracts for planes in then what would be its projected operating profit?
If Boring automated its production process further and increased its fixed costs by US$ million then it can achieve a reduction of variable cost per airplane by US$ million.
c What are the breakeven point?
d the operating profit if planes will be sold in
e Your comments on the results?
Ignore question c to e above. If fixed costs do not change but variable costs increase by before deliveries of any airplanes in
f What is the new breakeven point?
g What strategies might Boring use to help assure profitable operations in light of increases in variable costs?
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