A company sells a single product with a contribution margin of $23 per unit. The company...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A company sells a single product with a contribution margin of $23 per unit. The company currently sells 1700 units per year and management believes that if they reduce the sales price by $1 per unit, sales will increase by 15%. How much will annual profit change if they take this action? (Round your final answer to the nearest dollar. Make sure to calculate the change in profit and not the new total profit. Indicate an increase in profit with a positive number and a decrease in profit with a negative number.) A company sells a single product with a contribution margin of $23 per unit. The company currently sells 1700 units per year and management believes that if they reduce the sales price by $1 per unit, sales will increase by 15%. How much will annual profit change if they take this action? (Round your final answer to the nearest dollar. Make sure to calculate the change in profit and not the new total profit. Indicate an increase in profit with a positive number and a decrease in profit with a negative number.)
Expert Answer:
Answer rating: 100% (QA)
To calculate the change in annual profit we need to compare the current prof... View the full answer
Posted Date:
Students also viewed these accounting questions
-
Carolina Beach Chair Inc. is considering buying the cup holders for the beach chairs they manufacture, instead of producing them. Carolina's costs for each cup holder include Direct Materials $0.85,...
-
Floyd's corporation has $25,000 in current liabilities and $33,000 in current assets. Its initial inventory level is $8,000; and it will rise funds as additional notes payable and use them to...
-
Bob designed a face shield for front line health workers. The new product is expected to gain 1 5 0 0 0 0 in revenue l . The projects life cycle is five years. He will invest $ 6 0 , 0 0 0 in a 3 D...
-
An unknown compound A of molecular formula of C10H180 reacts with H2S04 and heat to form two compounds (B and C) of molecular formula C10H16. B and C both react with H2 over Pd/C to form decalin....
-
Gillis Manufacturing Company has in its capital structure $20 million of 13.5 percent sinking-fund debentures . The sinking-fund call price is $1,000 per bond, and sinking-fund payments of $1 million...
-
The after-tax annual equivalent worth of retaining a defender over four years (physical life) or operating its challenger over six years (physical life) are as given in Table PI4.23. TABLE PI4.23 If...
-
Intercontinental Oil and Gas Company drilled an exploratory well that found reserves, but the reserves could not be classified as proved at that time. No major capital expenditure was required. How...
-
Orlando Auto Accessories produces pickup truck bumpers that it sells on a wholesale basis to new car retailers. The average bumper sales price is $160. Normal annual sales volume is 300,000 units,...
-
Exxon Mobil Corporation refines petroleum products using process costing. In October 2031, the company incurs costs of $180 million and produces 3 million barrels of refined petroleum. During...
-
Shamrock Oil owns a parcel of land that has the potential to be an underground oil field. It will cost $450,000 to drill for oil. If oil does exist on the land, Shamrock will realize a payoff of...
-
You have been assigned to perform an operational audit of the vehicle mainte nance department of a large university. What factors will you consider in deter mining if the department is operating...
-
What is the impedance seen looking into a simple active load?
-
During the 1970s and 1980s, all of the rules of conduct listed below were either substantially modified or eliminated except a. Advertising and solicitation. b. Independence. c. Competitive bidding....
-
What four areas are covered by the rule on general standards?
-
Define differential-mode and common-mode input voltages.
-
La doctora Vel zquez acuerda pagar 4 5 mensualidades de $ 3 , 1 2 5 por un pr stamo que adquiri con una tasa del 1 4 % convertible mensualmente de cu nto fue el importe del pr stamo ? a . 1 0 8 , 9 2...
-
Why is it important to understand the macro-environment when making decisions about an international retail venture?
-
What problems can result from the use of tight standards?
-
How is a cost center different from either an investment or a profit center?
-
How is standard labor time determined? Explain the two ways.
Study smarter with the SolutionInn App