Mohan, an artist, wants to know how many caricatures he must sell to realize a yearly profit objective of $30,000. Each caricature sells for $20 and costs $5 in materials to make. The fixed costs for Mohan’s studio are $30,000 per year.
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- Mohan, an artist, wants to know how many caricatures he must sell to realize a yearly profit objective of $30,000. Each caricature sells for $20 and costs $5 in materials to make. The fixed costs for Mohan’s studio are $30,000 per year.
- A distribution chain for hotel room art includes the artist, a wholesaler, the hotel chain, and the individual hotel franchise owner. The artist sells each painting to the wholesaler for $80, realizing a 75% margin on the selling price. The wholesaler sells the art to the hotel chain for a 50% margin. The hotel chain then sells the art to its individual hotel franchise owners, and earns a 20% margin.
- If the cost for the artist to produce each painting doubles due to a shortage in canvas, what is the new cost to the hotel franchise owner if every member of the distribution chain maintains the same DOLLAR margin?
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- The owner of a small local flea market rents tables to vendors every Sunday. His only expense is the purchase of the building in which the flea market operates at a cost of $450,000. The owner expects to rent about 20 tables per week (1000 per year), and wishes to receive a 12% annual return on his investment in the building. What gross margin (in dollars) should the owner use?Having recently graduated with a visual arts degree, Zane is considering starting a new business in this field, selling exotic artwork. He believes he can sell each piece of artwork for an average price of $600. The suppliers of the artwork will be paid a commission of 25% of the price. Artwork will be packed and delivered to the customer. Zane estimates that packing and delivery costs should be about $30 per product. There will be additional expenses associated with running the store. Rent will be $5,400 per month. Utilities (which it is assumed will not vary from month to month) will be $990 per month. Insurance and other expenses will be $750 per month. He plans to pay himself and one sales assistant salaries of $10,500 per month ($7,500 for himself and $3,000 for his assistant). The tax rate is assumed by Zane to be 30%. Required: a. Based on the information how many pieces of artwork per month would Zane need to sell to break even? Show all workings. b. If Zane wanted to earn a…Xavi sells seashore paintings. His annual Fixed Costs are $1,000 and the Variable Costs are $8 per painting. Xavi is considering advertising his artwork in a local gallery, the cost of which is $80 per month. What would be the new annual breakeven revenue (in dollars) if he continues to sell his pieces for $15?
- Gloria is planning on opening a cake shop. She has found a location that rents for $15,550 per year and it will cost her another $13,716 to furnish the shop and purchase all the necessary equipment. She plans on charging $20 for a cake and it will cost her $3 per cake for ingredients and $1.92 per cake for decorations and $1.59 per cake for the beautiful, colorful to-go boxes. What is the dollar breakeven point she will need to earn to cover her costs in the first year? Round to the nearest whole number.- "Jack's T-Shirt Emporioum" produces novelty T-Shirts, with the primary equipment being a screen print machine. a "Jack's" generates $60,000 a year in profit. - Jack (the owner) feels that he could increase sales if he had a new machine with advanced capabilities (e.g. embroidery), so he purchases a new machine for $30,000 (cash). Jack estimates this machine to have an effective useful life of 5 years, and $5,000 residual (salvage) value, so Depreciable Value = $25,000. The new machine will depreciate over 5 years at $5,000 / year. o In this years financial statements, Jack reflects the purchase as a $5,000 expense, thus reducing his profit to $55,000. o Jack will show a $5,000 expense for Machine Purchase over the following 4 years. %3D Quiz#5: In the “Jack's" example, what amount will be recorded in the Cash Flow Statement related to this machine purchase?Hannah Ortega is considering expanding her business. She plans to hire a salesperson to cover trade shows. Because of compensation, travel expenses, and booth rental, fixed costs for a trade show are expected to be $10,780. The booth will be open 22 hours during the trade show. Ms. Ortega also plans to add a new product line, ProOffice, which will cost $180 per package. She will continue to sell the existing product, EZRecords, which costs $94 per package. Ms. Ortega believes that the salesperson will spend approximately 12 hours selling EZRecords and 10 hours marketing ProOffice. Required a. Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 78 units of EZRecords and 59 units of ProOffice. b. Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 205 units of EZRecords and 110 units of ProOffice. Note: For all requirements, round "Cost per unit" to 2 decimal…
- Hannah Ortega is considering expanding her business. She plans to hire a salesperson to cover trade shows. Because of compensation, travel expenses, and booth rental, fixed costs for a trade show are expected to be $10,660. The booth will be open 26 hours during the trade show. Ms. Ortega also plans to add a new product line, ProOffice, which will cost $190 per package. She will continue to sell the existing product, EZRecords, which costs $103 per package. Ms. Ortega believes that the salesperson will spend approximately 16 hours selling EZRecords and 10 hours marketing ProOffice. Required a. Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 73 units of EZRecords and 59 units of ProOffice.Sure Care Health Maintenance Organization is seeking a managed care contract with a local manufacturing plant. Sure Care estimates that the cost of providing preventative and curative care for the 300 employees and their families will be $36,000 per month. The manufacturing company offered Sure Care a premium bid of $200 per employee per month. If Sure Care accepts this bid and contracts with the manufacturing firm, will Sure Care earn a profit or loss for the year? How much? Describe the steps you used to solve this question.Classical Glasses operates a kiosk at the local mall, selling s unglasses for $30 each. Classical Glasses currently pays $1,000 a month to rent the space and pays two full-time employees to each work 160 hours a month at $10 per hour. The store shares a manager with a neighboring kiosk and pays 50% of the manager’s annual salary of $60,000 and benefits of $12,000. The wholesale cost of the sunglasses to the company is $10 a pair. Q1. How many sunglasses does Classical Glasses need to sell each month to break even?
- Classical Glasses operates a kiosk at the local mall, selling s unglasses for $30 each. Classical Glasses currently pays $1,000 a month to rent the space and pays two full-time employees to each work 160 hours a month at $10 per hour. The store shares a manager with a neighboring kiosk and pays 50% of the manager’s annual salary of $60,000 and benefits of $12,000. The wholesale cost of the sunglasses to the company is $10 a pair. Q.If the store’s hourly employees agreed to a 15% sales-commission-only pay structure, instead of their hourly pay, how many sunglasses would Classical Glasses need to sell to earn an operating income of $5,300?Hannah Ortega is considering expanding her business. She plans to hire a salesperson to cover trade shows. Because of compensation, travel expenses, and booth rental, fixed costs for a trade show are expected to be $14,850. The booth will be open 33 hours during the trade show. Ms. Ortega also plans to add a new product line, ProOffice, which will cost $180 per package. She will continue to sell the existing product, EZRecords, which costs $92 per package. Ms. Ortega believes that the salesperson will spend approximately 23 hours selling EZRecords and 10 hours marketing ProOffice. Required a. Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 70 units of EZRecords and 46 units of ProOffice. b. Determine the estimated total cost and cost per unit of each product, assuming that the salesperson is able to sell 192 units of EZRecords and 104 units of ProOffice. Note: For all requirements, round "Cost per unit" to 2 decimal…Olga was planning to set up a business where she would purchase paintings for $1,050 per unit and sell them for $1,800 per unit. She wanted to conduct a break-even analysis and identified the following costs for running her business: $4,470.00 per month for store leasing, $54 per month website hosting fee, $5,150 per month for staff salary, $2,040 per month for advertising costs, and $25 per unit for labour charges to pack the paintings. a. How many paintings would she have to sell per month to break-even? Round up to the next whole number b. If she wants to make a profit of $24,000 in a month, how many paintings would she have to sell? Round up to the next whole number