Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hunter Gable is evaluating a business cpportunity to sell premium car wax at vintage car shows. The wax is sold in 64 -ounce tube. Huncer

image text in transcribed
image text in transcribed
image text in transcribed
Hunter Gable is evaluating a business cpportunity to sell premium car wax at vintage car shows. The wax is sold in 64 -ounce tube. Huncer can buy the premium wax at a wholesaln cost of 335 per tue Het plans to sell the premium wax for $90 per fub. He estimates fixnd costs wuch as travel costs, booth rental cost, and lodging to bo 31,210 per car show Read the reovirements- Requirement 2 a. Determine the nales volume in units necestary to eam the desired profit assuming Hiunter wants to earn a profit of $990 per thow Hunter must sell tubs per show to eam a proft of $990 per show. b. Desermine the sales volume in dollars necessary to earn the desired prolt assuming Hurster wants to earn a proft of 990 per show. Begin by identifying the formula to compute the sales volume in dollars necessary to earn the desired profit. Hunter-must achieve sales of * = Targot sales in dolars c. Using the contrbution masgin format, peepare an income statement (condensed verion) to confirm your arswers to parts a and b. dollars, unats, and as a percentage. 1. Determine the number of tubs Hunter must sell per show to break even. 2. Assume Hunter wants to earn a profit of $990 per show. a. Determine the sales volume in units necessary to earn the desired profit. b. Determine the sales volume in dollars necessary to earn the desired profit c. Using the contribution margin format, prepare an income statement (condensed version) to confirm your answers to parts a and b. 3. Determine the margin of safety between the sales volume at the breakeven point and the sales volume required to earn the desired profit. Determine the margin of safety in both sales dollars, units, and as a percentage. Requitement 3. Determine the margin of nafety between the sales volume at the breostevent point and the asies volume rsquirnd to eam the desired profit. Delurm dollats; units, and as a percentage. Begin by identifying the formula to compute the margin of salety in thiliars. The margin of safoty in dollars is Now identify the formula to compute the margin of safety in units - Margin of tafety in dollars The margin of safety in units is Now identify the formula to compute the margin of safety as a percentage. Margin of aafety as a = percentage of target sales The margin of satety an a percentage of target sales is

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

Visual Auditory And Kinesthetic Self Audit Communication And Learning Profiles

Authors: Brian Everard Walsh, Ronald Willard, Astrid Whiting

1st Edition

098666555X, 978-0986665554

More Books

Students also viewed these Accounting questions