Question
Our team is hired by Apple to help assess whether or not to continue to manufacture and sell an older model of the iPhone. Apple
Our team is hired by Apple to help assess whether or not to continue to manufacture and sell an older model of the iPhone. Apple explains that this model continues to sell well in foreign markets but it worries that fixed costs are so large that it is difficult to earn a profit. The Tableau Dashboard is provided to aid our analysis of this model.
TOTAL FIXED COSTS:
factory expense = $10,250,000
production manager salaries = $8,500,000
insurance expense = $6,000,000
equipment (straight-line) depreciation expense = $5,350,000
advertising expense = $5,000,000
VARIABLE COSTS PER UNIT:
battery = $10
camera = $45
internal components = $90
receiver = $35
screen = $95
speaker = $25
SALES PRICE PER UNIT:
iphone sales price per unit $750
Answer the requirements for each of the following separate situations. 1. If Apple expects sales of 100,000 units, compute its margin of safety (a) in dollars and (b) as a percent of expected sales.
Print References Required 1 Required 2A Required 2B Required 3A Required 3B If Apple expects sales of 100,000 units, compute its margin of safety (a) in dollars and (b) as a percent of expected sales. Margin of Safety (a) Dollars (b) Percent 22%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