Flexo Printing Company currently leases its only copy machine for $1,400 a month. The company is considering replacing this leasing agreement with a new contract that is entirely commission based. Under the new agreement Flexo would pay a commission for its printing at a rate of $25 for every 500 pages printed. The company currently charges $0.25 per page to its customers. The paper used in printing costs the company $0.04 per page and other variable costs, including hourly labor, amount to $0.05 per page. Read the requirements, The commission based agreement would be preferred at U units up to the indifference point. Requirement 3. Flexo estimates that the company is equally likely to sell 17,500, 27,500, 37,500, 47,500, or 57,500 pages of print. Using information from the original problem, prepare a table that shows the expected profit at each sales level under the fixed leasing agreement and under the commission-based agreement. What is the expected value of each agreement? Which agreement should Flexo choose? Begin with the fixed leasing agreement. (Use parentheses or a minus sign for losses.) Fixed leasing agreement Expected Sales level Profit (Loss) Profit(Loss) 17,500 $ 1.400 S 280 27,500 $ 3,000 S 600 37,500 $ 4,600 $ 47,500 $ 6,200 $ 1,240 57,500 $ 7,800 S 1,560 Total expected profit/(loss) S 4,600 920 Next, calculate the expected profit at each sales level under the commission based agreement. Commission-based agreement Expected Sales lovel Profit (Loss) Profit/(Loss) 17,500 27.500 Enter any number in the edit fields and then click Check Answer ? 1 part Clear All Check Answer remaining Flexo Printing Company currently leases its only copy machine for $1,400 a month. The company is considering replacing this leasing agreement with a new contract that is entirely commission based. Under the new agreement, Flexo would pay a commission for its printing at a rate of $25 for every 500 pages printed. The company currently charges $0.25 per page to its customers. The paper used in printing costs the company $0.04 per page and other variable costs, including hourly labor, amount to $0.05 per page. Read the requirements. Sales level 17,500 27,500 Expected Profit/(Loss) Profit (Loss) $ 1,400 $ 280 $ 3,000 S 600 $ 4,600 S 37.500 920 1.240 47,500 $ 6,200 S S S 57,500 $ 7,800 1,560 S 4,600 Total expected profit(loss) Next, calculate the expected profil at each sales level under the commission based agroem Commission-based agreement Expected Sales level Profit (Loss) Profit(Loss) 17,500 27,500 37.500 47,500 57,500 Total expected profit/(loss) Enter any number in the edit fields and then click Check Answer. ? part 1 remaining Clear All Check Answer Flexo Printing Company currently leases its only copy machine for $1,400 a month. The company is considering replacing this leasing agreement with a new contract that is entirely commission based. Under the new agreement, Flexo would pay a commission for its printing at a rate of $25 for every 500 pages printed. The company currently charges $0.25 per page to its customers. The paper used in printing costs the company $0.04 per page and other variable costs, including hourly labor, amount to $0.05 per page. Read the requirements Requirement 1. What is the company's breakeven point under the current leasing agreement? What is it under the new commission-based agreement? First, determine the formula used to calculate the breakeven point in units, then calculate the company's breakeven point under the current leasing agreement. (Enter a 'O' for any zero balances.) Fixed costs Contribution margin per unit = Breakeven number of units S 1,400 0.16 8,750 i Requirements What is it under the new commission-based agreement? (Enter a "O" for any zero balances.) The company's breakeven point under the new commission-based agreement is O units 1. 2. Requirement 2. For what range of sales levels will Flexo prefer (a) the fixed lease agreement and (b) the commission agreement? In order to determine the range of sales levels Flexo would prefer for each agreement, we must first calculate the indifference point. The indifference point = sales volume at which the income from alternative 1 equals the income from alternative 2. 3. What is the company's breakeven point under the current leasing agreement? What is it under the new commission-based agreement? For what range of sales levels will Flexo prefer (a) the fixed lease agreement and (b) the corrimission agreement? Flexo estimates that the company is equally likely to sell 17,500, 27,500, 37,500, 47,500, or 57,500 pages of print. Using Information from the original problem, prepare a table that shows the expected profit at each sales level under the fixed leasing agreement and under the commission-based agreement. What is the expected value of each agreement? Which agreement should Flexo choose? Now calculate the indifference point. (Round to the nearest whole number.) The indifference point is at 28,000 units. Print Flexo would prefer the fixed lease agreement at sales more than the indifference point Done The commission based agreement would be preferred at 0 units up to the indifference point Requirement 3. Flexo estimates that the company is equally likely to sell 17.500, 27,500, 37.500, 47,500, or 57,500 pages of print. Using information from the original problem, prepare a table that shows the expected profit at each sales level under the fixed leasing agreement and under the commission-based agreement. What is the expected value of each agreement? Which agreement should Flexo choose? n...LAL...JI------------------------------------- Enter any number in the edit fields and then click Check Answer. ? 1 remaining Clear All Check Answer Flexo Printing Company currently leases its only copy machine for $1,400 a month. The company is considering replacing this leasing agreement with a new contract that is entirely commission based. Under the new agreement Flexo would pay a commission for its printing at a rate of $25 for every 500 pages printed. The company currently charges $0.25 per page to its customers. The paper used in printing costs the company $0.04 per page and other variable costs, including hourly labor, amount to $0.05 per page. Read the requirements, The commission based agreement would be preferred at U units up to the indifference point. Requirement 3. Flexo estimates that the company is equally likely to sell 17,500, 27,500, 37,500, 47,500, or 57,500 pages of print. Using information from the original problem, prepare a table that shows the expected profit at each sales level under the fixed leasing agreement and under the commission-based agreement. What is the expected value of each agreement? Which agreement should Flexo choose? Begin with the fixed leasing agreement. (Use parentheses or a minus sign for losses.) Fixed leasing agreement Expected Sales level Profit (Loss) Profit(Loss) 17,500 $ 1.400 S 280 27,500 $ 3,000 S 600 37,500 $ 4,600 $ 47,500 $ 6,200 $ 1,240 57,500 $ 7,800 S 1,560 Total expected profit/(loss) S 4,600 920 Next, calculate the expected profit at each sales level under the commission based agreement. Commission-based agreement Expected Sales lovel Profit (Loss) Profit/(Loss) 17,500 27.500 Enter any number in the edit fields and then click Check Answer ? 1 part Clear All Check Answer remaining Flexo Printing Company currently leases its only copy machine for $1,400 a month. The company is considering replacing this leasing agreement with a new contract that is entirely commission based. Under the new agreement, Flexo would pay a commission for its printing at a rate of $25 for every 500 pages printed. The company currently charges $0.25 per page to its customers. The paper used in printing costs the company $0.04 per page and other variable costs, including hourly labor, amount to $0.05 per page. Read the requirements. Sales level 17,500 27,500 Expected Profit/(Loss) Profit (Loss) $ 1,400 $ 280 $ 3,000 S 600 $ 4,600 S 37.500 920 1.240 47,500 $ 6,200 S S S 57,500 $ 7,800 1,560 S 4,600 Total expected profit(loss) Next, calculate the expected profil at each sales level under the commission based agroem Commission-based agreement Expected Sales level Profit (Loss) Profit(Loss) 17,500 27,500 37.500 47,500 57,500 Total expected profit/(loss) Enter any number in the edit fields and then click Check Answer. ? part 1 remaining Clear All Check Answer Flexo Printing Company currently leases its only copy machine for $1,400 a month. The company is considering replacing this leasing agreement with a new contract that is entirely commission based. Under the new agreement, Flexo would pay a commission for its printing at a rate of $25 for every 500 pages printed. The company currently charges $0.25 per page to its customers. The paper used in printing costs the company $0.04 per page and other variable costs, including hourly labor, amount to $0.05 per page. Read the requirements Requirement 1. What is the company's breakeven point under the current leasing agreement? What is it under the new commission-based agreement? First, determine the formula used to calculate the breakeven point in units, then calculate the company's breakeven point under the current leasing agreement. (Enter a 'O' for any zero balances.) Fixed costs Contribution margin per unit = Breakeven number of units S 1,400 0.16 8,750 i Requirements What is it under the new commission-based agreement? (Enter a "O" for any zero balances.) The company's breakeven point under the new commission-based agreement is O units 1. 2. Requirement 2. For what range of sales levels will Flexo prefer (a) the fixed lease agreement and (b) the commission agreement? In order to determine the range of sales levels Flexo would prefer for each agreement, we must first calculate the indifference point. The indifference point = sales volume at which the income from alternative 1 equals the income from alternative 2. 3. What is the company's breakeven point under the current leasing agreement? What is it under the new commission-based agreement? For what range of sales levels will Flexo prefer (a) the fixed lease agreement and (b) the corrimission agreement? Flexo estimates that the company is equally likely to sell 17,500, 27,500, 37,500, 47,500, or 57,500 pages of print. Using Information from the original problem, prepare a table that shows the expected profit at each sales level under the fixed leasing agreement and under the commission-based agreement. What is the expected value of each agreement? Which agreement should Flexo choose? Now calculate the indifference point. (Round to the nearest whole number.) The indifference point is at 28,000 units. Print Flexo would prefer the fixed lease agreement at sales more than the indifference point Done The commission based agreement would be preferred at 0 units up to the indifference point Requirement 3. Flexo estimates that the company is equally likely to sell 17.500, 27,500, 37.500, 47,500, or 57,500 pages of print. Using information from the original problem, prepare a table that shows the expected profit at each sales level under the fixed leasing agreement and under the commission-based agreement. What is the expected value of each agreement? Which agreement should Flexo choose? n...LAL...JI------------------------------------- Enter any number in the edit fields and then click Check Answer. ? 1 remaining Clear All Check