Twelve children who also lived on Hobart Street. Assume that fixed costs are incurred uniformly throughout the year.A girl in Welch who tries to befriend Jeannette and convince her to join the junior Ku Klux Klan. Calculate the effect on the company’s expected profits for the current year, and calculate the new break-even point. Assume that the outlet is opened at the beginning of the sixth month. The retail outlet is also expected to increase sales by 30%. As a result of adding the retail outlet, the additional publicity and emphasis on quality will allow the firm to change the sales mix to 1:1. This will increase common fixed cost by $70,000 per year. Artistic is considering adding a retail outlet. Fixed costs for the company are incurred uniformly throughout the year. Assume the machines are purchased at the beginning of the sixth month.
Compute the effect on operating income, and also calculate the new break-even point. If the machines are purchased, the variable costs for each type of cabinet will decrease by 9%, but common fixed cost will increase by$44,000. Currently, for every three Grade I cabinets sold, seven Grade II cabinets are sold.Ĭalculate the number of Grade I and Grade II cabinets that are expected to be sold during the current year.Ĭalculate the number of Grade I and Grade II cabinets that must be sold for Artistic to break even.Īrtistic can buy computer-controlled machines that will make doors, drawers, and frames. Grade I Grade II Unit Price $3, 400 1, 600 Unit Variable Cost $2, 686 1, 328 Direct Fixed Cost $95, 000 95, 000 Ĭommon fixed costs (fixed costs not traceable to either cabinet) are $35,000. The average unit selling prices, unit variable costs, and direct fixed costs are as follows: More than 200 cabinet shops are all competing for the same business.Īrtistic currently offers two different quality grades of cabinets: Grade I and Grade II, with Grade I being the higher quality. Unfortunately, the cabinet business in the region where Artistic is located is highly competitive. Volume for the first five months of the current year totaled$600,000, and sales were expected to be $1.6 million for the entire year. Last year, sales volume totaled $850,000. Employees were added as the business expanded. began several years ago as a one-person, cabinet-making operation.
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