1.Alex Miller, Inc., sells car batteries to service stations for an average of $30 each. The variable cost of each battery is $20 and monthly fixed manufacturing costs total $10,000. Other monthly fixed costs of the company total $8,000.

Required:

a.What is the breakeven point in batteries?
b.What is the margin of safety, assuming sales total $60,000?
c.What is the breakeven level in batteries, assuming variable costs increase by 20%?
d.What is the breakeven level in batteries, assuming the selling price goes up by 10%, fixed manufacturing costs decline by 10%, and other fixed costs decline by $100?

Answer:

a. The breakeven point in batteries is:
$30X-$20X-$18,000=0
$10X-$18,000=0
$10X=$18,000
X=$18,000/$10
X=1,800 batteries
The breakeven point in batteries is 1,800 batteries.

b. The margin of safety, assuming sales total $60,000 is:
$30*1,800 batteries=$54,000
$60,000 – ($54,000)
The Margin of safety assuming sales total $60,000 is $6,000.

c. The breakeven level in batteries, assuming variable costs increase by 20% is:
VC=$20*1.20
VC=$24
$30X-$24X-$18,000=0
$6X-$18,000=0
$6X=$18,000
X=$18,000/$6
X=3,000 batteries.
The breakeven level in batteries, assuming variable costs increase by 20% is 3,000 batteries.

d. SP=$30*1.10
SP=$33
Manufacturing FC=$10,000*0.90
Manufacturing FC=$9,000
OtherFC=$8,000-$100
OtherFC=$7,900
$33X-$20X-$9,000-$7,900=0
$13X-$16,900=0
$13X=$16,900
X=$16,900/$13
X=1,300 batteries
The breakeven level in batteries, assuming the selling price goes up by 10%, fixed manufacturing costs decline by 10%, and other...

...
Learning Healthcare Organizations
Willie Paranal
Dr. Martha Jennings
There are two healthcare organizations that I will be discussing that have transformational change to promote/create learning organization. One is the Centers for Disease Control and Prevention (CDC), and the other one is International Agency for Research on Cancer (IARC). CDC is a federal agency under the Department of Health and...

...
Week5: Multicultural Counseling Video Analysis
Marcy Ross
BSHS/465: Professional Development and Identity
May 25, 2015
Jennifer Schmitz
The counselors help the clients to become aware of their own expression of cultural identity by asking them questions. The series of questions asked allows the clients to think and truthfully answer and express themselves. This method gives the counselors insight to really get to the bottom of what is going on...

...Problems 5-1 through 5-2 (Graded)
5-1 Earned Value Calculation
You are 4 months into a 6 month project. The project is linear, which means that the progress and spending occurs at a constant rate. Our crack project team of highly skilled associates has worked diligently and put in extra hours to keep the project going. Our accounting department has provided the following data at the end of month 4:
Actual cost to date = $88,800
Planned...

...your work.
Training Satisfaction
2
The company provided the needed training.
Training Satisfaction
3
You were fairly paid for the work you did.
Compensation Satisfaction
4
You were given as many hours that you desired.
Compensation Satisfaction
5
Your supervisor treated you fairly.
Treatment Satisfaction
6
Your manager treated your division fairly.
Treatment Satisfaction
7
The company is good at communicating.
Communication Satisfaction
8
Your job was secure....

...investments that are expected to generate positive NPV’s.
If a firm has several projects that are expected to generate negative IRR’s.
If a firm has more than one project with a positive NPV.
Warning
Don't show me this message again for the assignment
Question 5
Your answer is correct.
How firms estimate their cost of capital: The WACC for a firm is 19.75 percent. You know that the firm is financed with $75 million of equity and $25 million of debt. The...

...permission to do this. If the appropriate interest rate is 6 percent, what is the present value of the cash flow stream that the company is offering you? (Round answer to the nearest whole dollar, e.g. 5,275.)
Present value
$
Link to Text
Question 5
Barbara is considering investing in a stock and is aware that the return on that investment is particularly sensitive to how the economy is performing. Her analysis suggests that four states of the economy can affect the return...

...Individual AssignmentWeek5
Richard Marrero
University Of Phoenix
QNT/561
March 14, 2012
Professor Rolando Alicea
Individual AssignmentWeek5
Chapter 10 Exercise 31
Answer:
H0: = 10 Pounds
H1: < 10Pounds Reject the null hypothesis if Z < -1.65
9.0 – 10.00
Z = -2.53
2.8/sqrt (50)
The null hypothesis is rejected; the average weight loss is less than 10...

...employees negatively impacted by perceived work load imbalances.” (Marson, C, (1989)) (Para 1) Another reason that the Acme Fireworks Company should choose to hire temporary employees is because, if the contracts fall through the company can end the assignment of the temporary employees and still be able to continue to produce the products that they did before the new contracts happened.
An LLC partnership would be a good structure change for this company. The owner of Acme...

## Share this Document

Let your classmates know about this document and more at StudyMode.com