Break Even Analysis and Profit Planning Reebok Corporation manufactures running shoes The selling price is $85 per pair (unit) and variable costs are $60 35 per pair (unit) The sales volume of $1,232,500 generates $120,250 of operating income before taxes Required A) Compute total fixed costs B) Compute total variable costs C) Compute the break even point in units D) Compute the quantity of units above the break even point to reach targeted operating income before taxes of 125,000 Matthew is considering several possible investment alternatives Option A Matthew could receive $8,000 today Option B Matthew could receive $2,500 at the end of each of the next four years Option C Matthew could receive $12,000 five years from now Required Calculate the net present value for each option assuming that Matthew can earn 7 percent on any investment funds Which option results in the greatest financial benefit to Matthew If Matthew earns 10 percent, will that change your answer to 2 above Please explain Period Data 1)34 2)18 3)44 4)28 1)Make an exponential smoothing forecast for periods 2 through 5, withtwo values of alpha 0 10 and alpha 0 60 and as assumed forecast for period 1 of 32 2)Compute the MAD for each of the forecasts 3)Which value of alpha should your choose and why Jim's moving company provides terms of 2 10, net 30 The company has annual credit sales of $800,000, cash sales of $125,000 and average accounts receivable of $72,000 a)What is the company's accounts receivable turnover b)What is their average daily collection period c)What is the relationship between the terms that the company is giving their average daily collection

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Break-Even Analysis and Profit Planning Reebok Corporation manufactures running shoes.The selling price is $85 per pair (unit) and variable costs are $60.35 per pair (unit).The

Break-Even Analysis and Profit Planning

Reebok Corporation manufactures running shoes.The selling price is $85 per pair (unit) and variable costs are $60.35 per pair (unit).The sales volume of $1,232,500 generates $120,250 of operating income before taxes.

Required:

A) Compute total fixed costs.

B) Compute total variable costs.

C) Compute the break-even point in units.

D) Compute the quantity of units above the break-even point to reach targeted operating income before taxes of 125,000.

Matthew is considering several possible investment alternatives:

Option A:Matthew could receive $8,000 today.

Option B:Matthew could receive $2,500 at the end of each of the next four years.

Option C:Matthew could receive $12,000 five years from now.

Required:

Calculate the net present value for each option assuming that Matthew can earn 7 percent on any investment funds.
Which option results in the greatest financial benefit to Matthew?
If Matthew earns 10 percent, will that change your answer to # 2 above?Please explain.

Period Data

1)34

2)18

3)44

4)28

1)Make an exponential smoothing forecast for periods 2 through 5, withtwo values of alpha 0.10 and alpha 0.60 and as assumed forecast for period 1 of 32.

2)Compute the MAD for each of the forecasts.

3)Which value of alpha should your choose and why?

Jim's moving company provides terms of 2/10, net/30. The company has annual credit sales of $800,000, cash sales of $125,000 and average accounts receivable of $72,000.

a)What is the company's accounts receivable turnover?

b)What is their average daily collection period?

c)What is the relationship between the terms that the company is giving their average daily collection?