Font P aragraph Styles Dictate BREAKEVEN ANALYSIS (refer to slides # 1417) 3. Using the information in Ques. #1 A & B above: A) Compute the breakeven point for the following: 1. Total annual revenue of $5,400,000 2. Total annual revenue of $6,000,000 3. Total annual revenue of $4,800,000 B) compute the BE for cach of the 3 selling prices given in #3 A above if the company has a profit goal of $50,000. This is a fixed profit goal so it impacts your fixed costs because it is not tied to # of units sold. (Use fixed costs from #3A above) C) compute the BE for each of the 3 selling prices given in #3 A above if the company has a profit goal of 10% of sales. This is fluctuating or variable profit goal that is tied to the of units sold so it impacts your Variable Costs per unit which then changes your Cont. Margin. You will add 10% of each of the 3 selling prices to your VCunit. (Use original Fixed Costs in 43A above) (Refer to slide # 28) Dj What price are you going to charge for your product? What factors will influence your decision A) Assume the following: 600,000 Number of houscholds in the market: Average number of arrangement purchased per household per year Company's estimate share of the total market SOLVE FOR THE FOLLOWING: Total annual market demand Estimated annual company demand Estimated monthly company demand Estimated weekly demand B) Given the following for your flower shop: (refer to slides #14 and 15) Annual Expenses: Salaries: $ 35,000 Hourly labor: $10.00 Flowers: $7.00 Gas: $2.000 Rent: $14,800 Advertising: $1,800 Insurance: $3,000 Utilities: S 2.400 Supplies $ 3,00 Total Fixed Costs: Total Var Costs: Fixed Costs per unit: Variable Cost per unit Font P aragraph Styles Dictate BREAKEVEN ANALYSIS (refer to slides # 1417) 3. Using the information in Ques. #1 A & B above: A) Compute the breakeven point for the following: 1. Total annual revenue of $5,400,000 2. Total annual revenue of $6,000,000 3. Total annual revenue of $4,800,000 B) compute the BE for cach of the 3 selling prices given in #3 A above if the company has a profit goal of $50,000. This is a fixed profit goal so it impacts your fixed costs because it is not tied to # of units sold. (Use fixed costs from #3A above) C) compute the BE for each of the 3 selling prices given in #3 A above if the company has a profit goal of 10% of sales. This is fluctuating or variable profit goal that is tied to the of units sold so it impacts your Variable Costs per unit which then changes your Cont. Margin. You will add 10% of each of the 3 selling prices to your VCunit. (Use original Fixed Costs in 43A above) (Refer to slide # 28) Dj What price are you going to charge for your product? What factors will influence your decision A) Assume the following: 600,000 Number of houscholds in the market: Average number of arrangement purchased per household per year Company's estimate share of the total market SOLVE FOR THE FOLLOWING: Total annual market demand Estimated annual company demand Estimated monthly company demand Estimated weekly demand B) Given the following for your flower shop: (refer to slides #14 and 15) Annual Expenses: Salaries: $ 35,000 Hourly labor: $10.00 Flowers: $7.00 Gas: $2.000 Rent: $14,800 Advertising: $1,800 Insurance: $3,000 Utilities: S 2.400 Supplies $ 3,00 Total Fixed Costs: Total Var Costs: Fixed Costs per unit: Variable Cost per unit
