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I only need what's box in red. I have the top part Casey Albrecht, VP of Marketing for Doorway Computers, believes the company can sell
I only need what's box in red. I have the top part
Casey Albrecht, VP of Marketing for Doorway Computers, believes the company can sell 30,000 touch-screen laptops next year at s2000perscesuputer. The VP of Operations, Kelly 'Doenel, tells her that the variable costs of producing each machine will be S1,200 nd fied casts for the production facility are budgeted at S16.000,000 Casey has calculnted the unit contribution margin for each machine and the contribution margin ratio. What are they? 00 How much gross profit does she think the computer will make for Doonwuy? s Whar is the company's margin of safety both in dollar terms and in mumber of units? Casey's Director of Research, 1. Sleuth, then tells her that their main competitor, Nevolo, is plamning to introduce a similar machine or S1600, If Doorway meets their price, whan will ay meets their price, what will At S1,600, what will be the breakeven anit volume and sales revenue? Does production of the machine still look like a good idea? Casey calls Kelly. "We need to cut costs," she tells her. Kelly suggests that, by eliminating a few middle managers and cutting down rented warchouse space, they can reduce fixed costs by S2 million. Casey says, "Why didn't we do this anyway?" If Nevolo doesn't bring out their machine and we can still sell ours for $2,000, what will our breakeven point be, with S14 million in fixed costs? Then Mickey Bell, the CEO, calls her. "We need to make at least S10 million gross profit from this new computer," he says. "And we're not making any cuts in fixed costs this year. They'll stay at S16 million. How many will you need to sell and how much revenue will you need? By how much does this exceed breakeven? Now Casey hears from the CFO, Kerr Ching. "You're quoting all these numbers, Kerr warms "But have you taken income taxes into account? We need that S10 million profit after taxes and our corporate tax rate is 25%." Now what is the target unit sales volume and target sales revenue? What can Casey do to her plan to ensure the company's profit goal is feasibleStep by Step Solution
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