Friday, October 11, 2013

Abc Toys Company Exercise

Exercise: rudiment Toys company 1. ask Variable be= 3 x750 000=$2,250,000 hold heady Costs= 3x750 000= $3,000,000 administrative overhead= $1,500,000 in full cost= 6,750,000 Revenue= 9x750 000= 6,750,000 return= 1.5 x750 000= 0 2. whole interchange price = $9,00per unit; increase of 10% ? $9,90, gross revenue = 1,000,000-900,000=810,000units Direct Variable Costs$3x810,000= $2,700,00$3.00 Direct unconquerable Costs+ $3,000,000$3.00 administrative Overhead+ $1,500,000$1.50 Full cost= $6,750,000$8.00 Revenue810,000x$9.9= $8,910,000$9.90 Profit$8,019,000- $6,930,000= $1,710,000$1.90 3. Unit selling price = $8.10 per unit; unit sales = 1.1million unit Direct Variable Costs$3x1,100,000= $3,300,000$3.00 Direct Fixed Costs+ $3,000,000$3.00 Administrative Overhead+ $1,500,000$1.50 Full cost= $7,800,000$7.09 Revenue1,100,000x$8.
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1=$8,910,000$8.10 Profit$1,110,000$1 4. selling implications of each price strategy: If first principle Toys increases the price to $9.90 and it sales decrease (to 810,000units), it will choose more proceeds: $1.35 per unit. Otherwise, whether ABC Toys decreases the price to $8.10, it sales increases to 1,100,000units the profit will be less(prenominal) interesting and about $1 per unit. To conclude, ABC toys should increase it price, the sales will be less fundamental but it will make more profit.If you want to defecate a full essay, order it on our website: OrderCustomPaper.com

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