7a3: The Poseidon Swim Company produces swim trunks. The average selling price for one of their swim
Question:
7a3:
The Poseidon Swim Company produces swim trunks. The average selling price for one of their swim trunks is $71.84. The variable cost per unit is $27.14, Poseidon Swim has average fixed costs per year of $19,065.
What would be the operating profit or loss associated with the production and sale of 408swim trunks?
7b3:
Use the following information about Rat Race Home Security, Inc. to answer the questions:
Average selling price per unit $320.
Variable cost per unit $189
Units sold 324
Fixed costs $9,077
Interest expense $17,659
Based on the data above, what is the degree of financial leverage of Rat Race Home Security, Inc.?
7c3:
Haunted Forest, Inc.is selling fog machines.
Use the following information about Haunted Forest, Inc. to answer the following questions.
Average selling price per unit $345.
Variable cost per unit $216
Units sold 340
Fixed costs $17,366
Interest expense $3,548
Based on the data above, what will be the resulting percentage change in earnings per share if they expect units produced and sold to change -0.2 percent?
(You should calculate the degree of total (combined) leverage first).
(Write the percentage sign in the "units" box).
Round the answer to two decimals
7e3:
Genetic Insights Co. purchases an asset for $11,345. This asset qualifies as a seven-year recovery asset under MACRS. The seven-year fixed depreciation percentages for years 1, 2, 3, 4, 5, and 6 are 14.29%, 24.49%, 17.49%, 12.49%, 8.93%, and 8.93%, respectively. Genetic Insights has a tax rate of 30%. The asset is sold at the end of six years for $4,613.
Calculate gain or loss on disposal.
Gain should be entered as a positive number. Loss should be entered as a negative number.Round the answer to two decimals.