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- Break-even analysis for a service company3 Sprint Corporation (S) is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 60 million direct subscribers (accounts) that generated revenue of 33,347 million. Costs and expenses for the year were as follows (in millions): Assume that 30% of the cost of revenue and 70% of the selling, general, and administrative expenses are fixed to the number of direct subscribers (accounts). a. What is Sprints break-even number of accounts, using the data and assumptions given? Round to one decimal place. b. How much revenue per account would be sufficient for Sprint to break even if the number of accounts remained constant? Round to one decimal place.Question 1 Pacific Telemet Ltd. manufactures a high end smart phone with dual sim cards that is popular with business executives who travel overseas frequently. Related financial data for this product for the last year is as follows:Sales 12,000 unitsSelling price $460 per unitVariable manufacturing cost $184 per unitFixed manufacturing costs $360,000 Variable selling and administrative costs $36 per unit Fixed selling and administrative costs $600,000.The CEO is under pressure from the Board of Directors to increase the profitability of the phones and has asked executives from different departments for suggestions. Three managers have responded with the following ideas:a) The production manager, David Groate, suggests making improvements to the quality of the product. These quality improvements would increase the variable costs by $36 per unit. This would be accompanied by a $60,000 national advertising campaign which he expects would boost sales volume by 30%.b) The sales manager,…Plz solve correctly. An automotive supply store sells a product that has a demand of 400 units per month. Its supplier charges an ordering cost of $60 per order and $25 per unit with a 20% discount for orders of 250 units or higher. The store incurs a 20% annual holding cost. What is the store’s total annual cost (purchasing, ordering, and holding) if it orders at a quantity of 300 units? a. $121,560 b. $96,000 c. $120,000 d. $97,560
- Question Description Company XYZ has a monthly rental amount of 2000 USD, credit payments(1200 per year), materials 30USD, Labor 70 USD, Unit selling price is 150$. Please find BEP andprepare a profit and loss statement. Going forward company also decided to look at theirproductivity from a multifactor perspective. To do so, CEO has determined his labor, capital,energy and material usage and has decided to use dollar as the common denominator. His totallabor hours are now 300 per day and will increase to 308 per day. His capital and energy costs willremain constant at $350 and $150 per day respectively. Material costs for 100 logs per day are$1000 and will remain the same. Because he pays an average of $10 per hour. a) calculate the productivity for current system and with professional buyer.b) Please prepare a flow diagram, process chart, activity chart and operations chart for a teacherteaching a class at FMS?Problem Situation: MVM Corporation seeks to partner with another company by letting them use and sell our software platform as a service, white labeled, in exchange for a revenue share. Data Price per customer 40,000 Revenue share (to us) 40% Total new customers 3 in first year, then 25 in year 2, then 100 in year 3, then 175 in year 4. Support rep cost per account 2,000 Hosting cost per account 500 New office for whitelabel team (annual) 75,000 Overhead payroll for whitelabel team (annual) 600,000 Capex buildout of whitelabeling platform 750,000 Find: (1) Revenue (2) COGS (3) Gross Profit (4) Gross Profit margin (5) Operating expenses (6) Operating income Assumptions: (1) Taxes 35% (2) Useful life of CAPEX 4 yearsProblem Situation: MVM Corporation seeks to partner with another company by letting them use and sell our software platform as a service, white labeled, in exchange for a revenue share. Data Price per customer 40,000 Revenue share (to us) 40% Total new customers 3 in first year, then 25 in year 2, then 100 in year 3, then 175 in year 4. Support rep cost per account 2,000 Hosting cost per account 500 New office for whitelabel team (annual) 75,000 Overhead payroll for whitelabel team (annual) 600,000 Capex buildout of whitelabeling platform 750,000 Find: (1) Revenue (2) COGS (3) Gross Profit (4) Gross Profit margin (5) Operating expenses (6) Operating income Assumptions: (1) Taxes 35% (2) Useful life of CAPEX 4 years Important: Analyze the result and…
- Consider the following information for a given business. Sale revenue =GHS40,000 VC per unit =GHS20 Activity level =1,000 to break even Required: 1. Determine the TFC 2. Express the contribution as a percentage of sale. 3. The company plans to sale 1,500 unit in the next period. What will be the percentage margin of safety (MoS) 4. What margin should the business employ for planning purposes? 5. What total profit should the business expect in order to achieve it's planned sales?Please solve this Question No. 3 CVP – Applied: Revising Sales IncentivesData concerning Wislocki Corporation's single product appear below: Per Unit Percent of SalesSelling price$ 180 100 %Variable expenses45 25 %Contribution margin$ 135 75 % Fixed expenses are $1,048,000 per month. The company is currently selling 9400 units per month.The marketing manager would like to introduce sales commissions as an incentive for the sales staff. Themarketing manager has proposed a commission of $12 per unit. In exchange, the sales staff would acceptan overall decrease in their salaries of $106,000 per month. The marketing manager predicts thatintroducing this sales incentive would increase monthly sales by 440 units. Required:What should be the overall effect on the company's monthly net operating income of this change?Computing breakeven sales and sales needed to earn a target profit; graphing CVP relationships; performing sensitivity analysis National Investor Group is opening an office in Portland, Oregon. Fixed monthly costs are office rent ($8,100), depreciation on office furniture ($1,700), utilities ($2,000), special telephone lines ($1,500), a connection with an online brokerage service ($2,500), and the salary of a financial planner ($5,200). Variable costs include payments to the financial planner (9% of revenue), advertising (11% of revenue), supplies and postage (4% of revenue), and usage fees for the telephone lines and computerized brokerage service (6% of revenue). Requirements Use the contribution margin ratio approach to compute Nationals breakeven revenue in dollars. If the average trade leads to $1,000 in revenue for National, how many trades must be made to break even? Use the equation approach to compute the dollar revenues needed to earn a monthly target profit of $12,600.…
- The Reward One Company manufactures windows. Its manufacturing plant has the capacity to produce 12,000 windows each month. Current production and sales are 10,000 windows per month. The company normally charges $250 per window. Requirement 1. Should Reward One accept this special order? Show your calculations. Begin by completing an analysis, and start by showing the computation of the company's operating income without the special order. Next, calculate operating income with the special order, and then calculate the differences between the two columns. (Complete all input fields. For amounts with no change, make sure to enter "0" in the appropriate cells of the Difference column.) Variable costs that vary with number of units produced Direct materials $600,000 Direct manufacturing labor 700,000 Variable costs (for setups, materials handling, quality control, and so on) that vary with number of batches, 100 batches × $1,500 per batch…Please answer the three questions below. Thanks! 1) Gilley, Inc., sells a single product. The company's most recent income statement is given below. Sales (4,000 units)- Variable Expenses Contribution Margin- Fixed ExpensesOperating Income $ 120,000(68,000)$ 52,000(42,000)$ 10,000 If 10 more units are sold, profits will increase by: 2) Using the information from Gilley, Inc. above, answer the following. The marketing manager believes that sales may increase next year by 20%. Using the operating leverage and the predicted increase in sales, what will TOTAL operating income be next year if the marketing manager is correct? 3) Using the information from Gilley, Inc. above, answer the following. The CEO of Gilley believes that sales will increase to 5,000 units next year and thinks that this may be a good time to lower variable cost and increase fixed costs through some minor automation in the plant. If they go ahead with this plan, variable costs per unit will…solve a,b and c please. Mcleavey Manufacturing has a demand for 1,000 pumps each year. The company outsources her production by ordering outside supplier, unit purchase price is 60$/ unit. Mc Leavey Manufacturing has to rent warehouse 10% of unit cost per year. And Mc Leavey Manufacturing pays for investment cost of 10% of unit cost per year. For ordering, the company must pay 50$/ order. a. What do you recommend if Mc Leavey Manufacturing get discount from his vendor with below schemes: Order quantity: discount price Less than 150 pumps: 5% discount rate More than 150 pumps: 10% discount rate b. If the company has plan to produce by themself then what is optimal production quantity? (given that they have production rate is 1500 units/year and setup cost is 100$). c. What is the optimal total annual inventory cost if they produce?
