Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Business Description After taking business classes, Cyrus, an avid sportsman, decided to start selling unique sporting supplies for children at trade shows. He has two

image text in transcribed

image text in transcribed

Business Description After taking business classes, Cyrus, an avid sportsman, decided to start selling unique sporting supplies for children at trade shows. He has two products: Product 1: "Ultimate Frisbee"- an aerodynamic frisbee that will sell for $15.00. Product 2: "Booming Boomerang"- a handcrafted wooden boomerang set. The boomerang will sell for $30.00. a Costs: Cyrus has hired an employee to work the trade show booths. The work contract is $1,000 per month plus a commission equal to 15% of selling price. Cyrus will also spend $545 per month on trade-show entry fees. Cyrus is purchasing the products from a supplier in Mexico. Ultimate frisbee costs $3.00 each; Booming boomerang cost $8 each. Shipping and handling on the Frisbee will cost $1.20 each; Shipping and handling on the Boomerangs which are heavier, will cost $4.00 each. The shipping and handling costs will be paid by Cyrus, not the customer. Assume Cyrus expects to sell 200 Frisbees and 100 Boomerangs during his first month of operations (November). The sales mix is 2" Frisbees" for every 1 "Boomerang" or a 2:1 ratio. Cyrus' long-term financial goal is to earn an operating income of $4,200 per month. ASSUMPTIONS Product #1: Sales price per unit Variable costs per unit: Frisbee $ 15.00 Total variable cost per unit Monthly volume Sales Mix Product #2: Sales price per unit Variable costs per unit: Boomeramg $ 30.00 Total variable cost per unit Monthly volume Sales Mix Fixed costs per month: Total fixed costs per month Target profit per month

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Theory Conceptual Issues In A Political And Economic Environment

Authors: Harry I. Wolk, James L. Dodd, John J. Rozycki

7th Edition

1412953456, 978-1412953450

More Books

Students also viewed these Accounting questions