XYZ Company bought rugs from the manufacturer at $50 each to be sold to the customers. The store's overhead expenses are 30% of cost, and the owners require a profit of 20% of cost. (a) For how much does XYZ Company sell each rug to the customers? (b) What is the price needed to cover all of the costs and expenses? (c) What is the highest rate of markdown at which the company will cover all of the costs and expenses? (d) What is the highest rate of discount that can be advertised without incurring an absolute loss?

1. ABC Inc. showed the following operating budget for the next year. Sales $ 1,625,000 Fixed cost $800,176 Total variable cost 374,725 Total cost 1,174,901 Net Income $ 450,099 Answer the following questions: Keep 8 decimal places for the contribution rate. (a) Calculate the total contribution margin and contribution rate (CR). Hint: For CR equation, consider multiplying both numerator and denominator by X (volume). (b) How much sales revenue does ABC Inc. need to generate to break-even? (c) Suppose the company decides to set a price of $65 for a unit of product that it sells. What is the break-even volume in units?

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Lets break down each question step by step XYZ Company a To calculate the selling price to customers ... View the full answer