Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Contribution analysis can be applied in a number of different ways. Fill out the following blanks for three scenario cases prepared for Boston Corp. in
Contribution analysis can be applied in a number of different ways. Fill out the following blanks for three scenario cases prepared for Boston Corp. in order to see how sensitively the outcomesbreak even analysis and contribution analysis with profit impactchange depending on changes in prices and costs.
I just need the solution (and steps to complete) for 3.28, 3.29, and 3.30
Blanks have already been filled in for the chart.
2 3 Selling preice Total Variable cost Contribution $ $ 200 $ 80$ 120 $ 160 $ 80 $ 80 $ 200 75 $ 125 Contribution margin ratio 60% 50% 63% Total Fixed overhead $ 3,00,000 $ 2,40,000 $ 3,00,000 Break even point (units) Fixed Cost Contribution per unit 2,500 3,000 2,400 Break even point ($) Fixed Cost Contribution margin ratio $ 5,00,000 $ 4,80,000 $ 4,80,000 Contribution at Break even point = Fixed Cost $ 3,00,000 $ 2,40,000 $ 3,00,000 No of Units to achieve profit of 300,000 Desired Profit + Fixed Cost Contribution per unit 5,000 6,750 4,800 Sales to achieve profit of 300,000 =(No. of units * selling price) $ 10,00,000 $10,80,000 $9,60,000 Contribution to achieve profit of 300,000 =(Sales * contribution marin ratio) $ 6,00,000 $ 5,40,000 $ 6,00,000 Net profit =(Contribution - Fixed cost) $ 3,00,000 $ 3,00,000 $ 3,00,000 3.28: Youthe strategic marketer and decision maker of Boston Corp.just estimated that "Company Sales Force (Make decision)" will receive 4% commission on total sales ($) and all the relevant salary and administrative expenses are expected to be $30,000, while Independent Sales Professionals (Buy decision)" receive 7% commission with no other costs involved. At what sales level (X; A.K.A. Switching point) would a company's sales force cost more or less than independent sales professionals? (4pts) 3.29: Depending on the computed (Sales) Dollars to achieve a dollar profit goal of $ 300,000 ($)' of each scenario case above, you will have to choose different decisionsMake or Buy. State your choice for each scenario and explain your rational. (4pts) 3.30: Due to the New California Labor and Employment Laws for 2023, all the relevant salary and administrative expenses for Company Sales Force (Make decision)" are expected to increase to $60,000, while all other conditions will stay the same, which are 4% commission for "Company Sales Force" and 7% commission for "Independent Sales Professionals." Based on the changed sales level (X, A.K.A. Switching point) and your computed (Sales) Dollars to achieve a dollar profit goal of $ 300,000 ($)' of each scenario case above, state your choiceMake or Buy-for each scenario and explain your rational. (4pts)Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started