13. Healthy Foods, Inc., sells 50-pound bags of grapes to the military for $10 a bag. The fixed costs of this operation are $80,000, while the variable costs of the grapes are $.10 per pound. a. What is the break-even point in bags?
Healthy Foods Inc. 1 Healthy Foods Inc. Robert Johnson FIN /200 - Introduction To Finance: Harvesting The Money Tree 8/12/2011 Instructor: Joseph Lane Healthy Foods Inc. 2 Healthy Foods, Inc., sells 50-pound bags of grapes to the military for $10 a bag. The fixed costs of this operation are $80,000, while the variable costs of the grapes are $.10 per pound. a. What is the break-even point in bags? $80, 000 $80,000 BE = $10-$5 = $5 = 16,000 bags b.
C) The answers are different because if the interest is left untouched, it makes the principal amount higher each year, giving more money after 10 years. Compounded interest allows for more money that simple interest would. 2. A) If the individual retires at the age of 65, having started the program at age 40, there would be $219,318 in the account. $3,000 x (8% in 25 years) 3000 x 73.106 = $219,318 B) If
The combined taxes are lower under part b because the majority of the corporation's earnings are only subject to one level of tax (the individual tax on the salary). In part a the taxable income after salary is $200,000 but in part b it is $50,000 since the deduction of $150,000 is taken and this leads to only $50,000 that is taxed twice in part b. 66. [LO 3] In its first year of existence (year 1), Willow Corp. (a C corporation) reported a loss for tax purposes of $30,000. In year 2 it reports a $40,000 loss.
Again, note that the actual state rate is reduced by 25% to allow for the deductibility of state income taxes on the federal income tax return. If Dana’s state tax rate increases to 10%, corporate bonds are still superior to Treasury bonds. 50. [LO 1] At the beginning of his current tax year David invests $12,000 in original issue U.S. Treasury bonds with a $10,000 face value that mature in exactly 10 years. David receives $700 in interest ($350 every six months) from the Treasury bonds during the current
What will be the monthly break-even point in number of passenger cars? 190 -70 = 120 90 * .6 = 54 Break-even for number of cars: (3,150,000 +0)/ (120) = 26250 26250/54 : 486 d. (Refer to original data.) Fuel cost is a significant variable cost to any railway. If crude oil increases by $ 20 per barrel, it is estimated that variable cost per passenger will rise to $ 90. What will be the new break-even point in passengers
b. The incremental revenue associated with a price reduction of $0.40 is $100,000 as follows: Original Revenue (325,000 × $5.00) | $1,625,000 | Revenue with price change (375,000 × $4.60) | 1,725,000 | Incremental revenue associated with price change | $ 100,000 | c. Yes, the price should be lowered since the incremental cost of this action ($64,000 in part a) is less than the incremental revenue ($100,000 in part b). P4. [LO 3]. a.
Record labels pay composers and publishers mechanical royalties. They try to cap mechanical royalty budgets at ten songs payable at 75% of the statutory rate ($.80 per song), which equals $.60 per song under the controlled composition clauses of recording contracts. Promotional Costs Major labels budget approximately 20% of annual gross income for promotion and selectively allocate the funds according to sales projections for each
Labor hours 20,000 The labor productivity (in hours) for Limited car: Units sold = 6,000 = 0.2 units per labor hour. Labor hours 30,000 The labor productivity (in dollars) for Deluxe car: Units sold * price/unit = 4,000 x 8,000 = 32,000,000 = 133.33 dollar per labor hour Labor hours * labor salary/hour 20,000 x 12 240,000 The labor productivity (in dollars) for Limited car: Units sold * price/unit = 6,000 x 9,500 = 57,000,000 = 135.71 dollar per labor hour Labor hours * labor salary/hour 30,000 x 14 420,000 Conclusion: For Deluxe car: on average, for every dollar the car manufacturer has spent, they get 132,33 dollar in return. While the units produced for every labor hour are 0.2 units. We could conclude that the car manufacturer makes huge profit for making Deluxe car. If we measure labor productivity in terms of units/hour, there will be quite enough important factors that we do not consider, such as the quality of the car (the selling price) and the skill level of the labors.
One suggestion is that the company reposition its water as a premium product, justifying a higher price. If successful, the company believes that it could charge 20% more for its water than it does now. 1. What is the maximum sales loss (in % and units) that Healthy Spring could tolerate before a 20% price increase would fail to make a positive contribution to its profitability? The maximum sales loss would be 25% before they can tolerate before a 20% price increase, which amount to 1,500 bottles per day instead of 2,000.