Loose Leaf for Foundations of Financial Management Format: Loose-leaf
17th Edition
ISBN: 9781260464924
Author: BLOCK
Publisher: Mcgraw Hill Publishers
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Chapter 7, Problem 25P
Problems 22-25 are a series and should be completed in order.
Now assume that the new trade terms of 3/18, net 60 will increase Dome’s sales by 15 percent because the discount makes Dome’s price competitive. If Dome earns 20 percent on sales before discounts, what will be the net change in income? Should it offer the discount?
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QUESTION 2
REQUIRED:
Use the information provided below to answer the following questions:
2.1 Calculate the total net profit for the estimated figures.
2.2 Calculate the break-even quantity
23 Calculate the break-even value
2.4 Calculate the break-even value using the marginal income ratio.
2.5 Calculate the target sales volume to achieve a profit of R15 000 000.
2.6 Calculate the new break-even quantity and value if the selling price is increased by 10%.
2.7 Calculate the margin of safety in units at the original budgeted volume and price
INFORMATION
Kitty Limited plans to manufacture bar fridges. According to the 2020 budget conducted by management, budgeted sales
are expected to be R10 000 000 with 5 000 units being produced. The company's direct material and direct labour costs
are expected to be 5000 cents and 3500 cents per unit respectively. Whereas, the fixed factory overheads and
fixed administrative expenses are budgeted at R450 000 and R200 000 respectively. Furthermore,…
May I ask for an explanation and solution to the question for a better understanding. Thank you!
1.If the sales this year amounted to P500,000, sales this year at last year’s prices is P460,000. The cost of sales this year is P300,000, and the cost of sales this year at last year’s price is P260,000. How much is the gross profit variation due to sales price factor?
a. P0
b. P400,000 U
c. P40,000 F
d. P240,000 F
e. can't be determined
May I ask for a solution and explanation to the problem for a better understanding. Thank you!
If the sales this year amounted to P276,000, sales this year at last year’s price is P230,000, the cost of sales this year is P190,000, and the cost of sales this year at last year’s price is P180,000. How much is the gross profit variation due to sales quantity factor?
a. P0
b. P40,000 U
c. P40,000 F
d. P240,000 F
e. can't be determined
Chapter 7 Solutions
Loose Leaf for Foundations of Financial Management Format: Loose-leaf
Ch. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Why would a financial manager want to slow down...Ch. 7 - Use The Wall Street Journal or some other...Ch. 7 - Why are Treasury bills a favorite place for...Ch. 7 - Explain why the bad debt percentage or any other...Ch. 7 - What are three quantitative measures that can be...Ch. 7 - Prob. 8DQCh. 7 - What does the EOQ formula tell us? What assumption...Ch. 7 - Why might a firm keep a safety stock? What effect...
Ch. 7 - If a firm uses a just-in-time inventory system,...Ch. 7 - City Farm Insurance has collection centers across...Ch. 7 - Prob. 2PCh. 7 - Orbital Communications has operating plants in...Ch. 7 - Postal Express has outlets throughout the world....Ch. 7 - Thompson Wood Products has credit sales of...Ch. 7 - Oral Roberts Dental Supplies has annual sales of...Ch. 7 - Knight Roundtable Co. has annual credit sales of...Ch. 7 - Darla’s Cosmetics has annual credit sales of...Ch. 7 - Barney’s Antique Shop has annual credit sales of...Ch. 7 - Mervyn’s Fine Fashions has an average collection...Ch. 7 - Route Canal Shipping Company has the following...Ch. 7 - Nowlin Pipe & Steel has projected sales of 72,000...Ch. 7 - Fisk Corporation is trying to improve its...Ch. 7 - Prob. 14PCh. 7 - Diagnostic Supplies has expected sales of 84,100...Ch. 7 - Wisconsin Snowmobile Corp. is considering a switch...Ch. 7 - Johnson Electronics is considering extending trade...Ch. 7 - Henderson Office Supply is considering a more...Ch. 7 - Fast Turnstiles Co. is evaluating the extension of...Ch. 7 - Slow Roll Drum Co. is evaluating the extension of...Ch. 7 - Global Services is considering a promotional...Ch. 7 - Problems 22-25 are a series and should be...Ch. 7 - Problems 22-25 are a series and should be...Ch. 7 - Problems 22-25 are a series and should be...Ch. 7 - Problems 22-25 are a series and should be...
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- Q4 From the following data, calculate: (a) PIV Ratio. (b) Profit when sales are OMR 40000. (c) New break-even point if selling price is reduced by 20%. Fixed Expenses OMR 8000. Break-Even point OMR 10000.arrow_forwardQuestion: You have a customer who has a 620 fico score and their preferred product requires you to add 1/8th percent to the interest rate of 6 3/4% (30 year fixed rate). What is the P&I payment for this customer if they are putting 10% down on a sales price of $195,000? a. $1,152.91 b. $1,109.28 c. $1,138.29 d. $1,167.61 Please answer with explanation I will really upvotearrow_forwardREQUIRED Use the information given below to calculate each of the following independently: 3.1 Expected total Marginal Income and Net Profit/Loss 3.2 3.3 3.4 3.5 Margin of safety (as a percentage; expressed to two decimal places) Break-even quantity if the selling price drops by 10% Break-even value using the marginal income ratio, if the company spends an additional R435 200 on salaries Selling price per unit that will enable the company to achieve a net profit of R1 500 000 INFORMATION Slumber Limited manufactures beds. The following information was extracted from the budget for 2024: Expected production and sales (units) Selling price per bed Direct materials cost per bed Direct labour cost per bed Variable manufacturing overheads cost per bed Fixed manufacturing overheads cost Sales commission (as a percentage of the selling price) Fixed administrative and selling costs 1 200 R6 000 R1 700 R860 R320 R1 084 800 20% R720 000arrow_forward
- If the demand equation is Q = 100-10P. find the consumer’s surplus when the consumer purchases 18 units. What is the revenue of the seller?arrow_forwardMay I ask for an explanation and solution to the question for a better understanding. Thank you! 2. If the sales this year amounted to P276,000, sales this year at last year’s price is P230,000, the cost of sales this year is P190,000, and the cost of sales this year at last year’s price is P180,000. How much is the gross profit variation due to sales quantity factor? a. P0 b. P40,000 U c. P40,000 F d. P240,000 F e. can't be determinedarrow_forwardIf the contribution margin ratio increases by 10% and all else remains the same, what is the effect on net income? O a. net income will increase by 20% b. more information is need to answer this question C. net income will increase d. net income will increase by 10%arrow_forward
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