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Answer the following questions with the associated solutions. 1. If sales is $13,000 and variable costs is $7,000, what is the contribution margin? points) 2.
Answer the following questions with the associated solutions. 1. If sales is $13,000 and variable costs is $7,000, what is the contribution margin? points) 2. Answer the questions by looking at the worksheet below. Break-Even Analysis Worksheet Store: Sallie's Accessories Location: 129 Fashion Way, Skokie, Illinois Product Line: Jewelry Period: Six months beginning June 2008 Item Unit Price (P) Fixed Costs (F) Variable Costs per Unit (V) Units to Break Even Watches $49.99 $23.25 $2,000 Necklaces $79.95 $29.50 $2,000 Rings $40.00 $2,000 40 Bracelets $19.95 $4.50 $2,000 Earrings $41.50 $12.00 $2,000 a. What are the total fixed costs assigned to the jewelry department for the six- month period? (2 points) What is the break-even point for necklaces, bracelets, watches, and earrings? (4 points) b. C. What would happen to the break-even point if Sallie raised the price of the bracelets by 0.50 cents and reduced it by 0.50 cents? (2 points) d. How much does a ring cost at Sallie's? (2 points) 3. Windy River sells each Sunset Bracelet for $13. The unit variable cost for the bracelet is $7.65. The amount of monthly fixed costs that sales of the Sunset Bracelet are expected to contribute is $280. How many units of the Sunset Bracelet must Windy River sell to break even? If Windy River sells 100 units after the Break Even Point, what is their profit and their revenue? (6 points) 4. Dani sells mirrors at weekend craft shows for $75 each. She makes the mirror frames out of colored pieces of glass and ceramic tile. The mirrors are very popular, and Dani has more orders than she can fill. Help Dani figure out how many mirrors she has to sell to break even. Dani estimates that her variable costs are $25 per mirror and her fixed costs are $1,000. (2 points)
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