1.The Sarah Cupcake Co. has fixed costs of $50,000 per year. It sells cupcakes in boxes of 6 for$7.50 each. Variable costs per unit are $3. This includes raw materials, packaging andcosts of labor and electricity for the ovens.

1a.What is the contribution margin of the product?

1b.Calculate the breakeven point in (a) unit sales and in (b) dollars

1c.Why is the answer not 11,111.111 units?

1d.What is the operating profit (loss) at 5,000 units per year?

1e.What is the operating(loss) at 15,000 units per year?

1f.Plot a breakeven chart (graph). Use the foregoing figures and other data as necessary. You should get straight lines.

2a .Mrs. Moore owns 100 shares of stock in Daimler-Benz valued at 31.50 Euros per share. What is the value in $U.S. of her stock if the current exchange rate is $1.00 = 0.87?

2b.What is the value of Mrs. Moore's stock in USD (dollars) if the exchange rate is 1.00 = $1.15?

2c.What was the value of Mrs. Moore's stock in USD (dollars) when she purchased the stock for 27.95 inApril 2003? At the time, 1.00 =$1.07330

2d.The stock pays no dividend. If Mrs. Moore sells the stock, what will havebeen her return in percent? You have the information about the cost and proceeds of the sale above.

3.Lisa Murphy sees a painting for auction in Japan that is expected to sell for 3,000,000. How much money in dollars will that be at an exchange rate of 120 yen to one dollar?

Assigned Problems 1 The Sarah Cupcake Co. has fixed costs of $50,000 per year. It sells cupcakes in boxes of 6 for $7.50 each. Variable costs per unit are $3. This includes raw materials, packaging and costs of labor and electricity for the ovens. 1-A What is the contribution margin of the product? 2 points The range is between $3 and $6 1-B Calculate the breakeven point in (a) unit sales and in (b) dollars and answer part (c). a) The range is between 10,000 and 13,000 units for the breakeven point in units. b) The range is between $75,000 and $90,000 for the breakeven point in dollalrs. (c) Why is the answer not 11,111.111 units? You determine this answer. 1-C What is the operating profit (loss) at 5,000 units per year? b) The range is between a negative 35,000 and a positive $10,000. 1-D What is the operating profit (loss) at 15,000 units per year? 3 points The range is between $10,000 and $20,000 1-E Plot a breakeven chart (graph). Use the foregoing figures and other data as necessary. You should get straight lines. You determine this answer. 2-A Mrs. Moore owns 100 shares of stock in Daimler-Benz valued at 31.50 Euros per share. What is the value in $U.S. of her stock if the current exchange rate is $1.00 = 0.87? The range is between $2,000 and $4,500 dollars. 2-B What is the value of Mrs. Moore's stock in USD (dollars) if the exchange rate is 1.00 = $1.15 ? You determine this answer. 2-C What was the value of Mrs. Moore's stock in USD (dollars) when she purchased the stock for 27.95 in April 2003? At the time, 1.00 = $1.07330 The range is between $2,000 and $4,000. 2-D The stock pays no dividend. If Mrs. Moore sells the stock, what will have been her return in percent? You have the information about the cost and proceeds of the sale above. You determine this answer. 3 Lisa Murphy sees a painting for auction in Japan that is expected to sell for 3,000,000. How much money in dollars will that be at an exchange rate of 120 yen to one dollar? You determine this answer. 4 Complete the assigned case Total points The Week 8 assignment completed our course section on global finance. In Week 9, we turn to the effectiveness of product cost determination and pricing. For perspective, lets review where we have been, where we are, and where we are going. From the Syllabus, here are Weeks 1-10 Subject Area Topic Week 1: Economic Analysis The economic environment of business Week 2: Financial Accounting Week 3: Financial Statement Analysis Evaluating corporate performance Week 4: Financial Valuation Valuation of stocks and bonds Week 5: Analysis of Financial Situations More advanced financial valuation methods Week 6: Ethics and Financial Reporting How reliable are audited financial statements? Week 7: Introduction to International Finance Week 8: Global Financial Investment Global finance Week 9: Cost Measurement Systems The effectiveness of product cost determination and pricing Week 10: The Balanced Scorecard Effective strategy implementation and performance evaluation