Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please solve it in Excel and use professional formatting. Please solve all parts as its 1 question, We recently started a fictional business URMask, selling

image text in transcribed

Please solve it in Excel and use professional formatting. Please solve all parts as its 1 question,

We recently started a fictional business "URMask", selling non-medical masks to the Uof community. Business started up on January 1, 2021 when we all returned to regular classes (yes this is future oriented and wishful thinking but let's go with this). Key Information: - Selling price is now set at $12.00 each. - Masks are purchased in bulk at a cost of $5.75 each. - We are renting a kiosk near the food court at a cost of $1,400 per month. - We hired an administrator - manager at a fixed salary of $1,600 per month. - Students handle sales on a commission basis for $2.25 per mask (no hourly wage). - During the first three months, sales averaged 1,000 masks per month Required (25 marks total): a) What are unit and total monthly contribution margin and CMR? Show calculations. (4 marks) b) Prepare a variable costing income statement for the first 3 months (5 marks) c) Calculate monthly breakeven in units and revenue (use separate formulae for each). (4 marks) d) Calculate the margin of safety in units and dollars (4 marks) e) A new kiosk is available starting April 2021 at a cost of $3,000 per month. From this better location we estimate an increase in sales revenue of $3,600 per month. Should we take the deal and move to the new location? Show calculations / explain answer. (4 marks) f) A new supplier has offered to sell us cheaper masks at a cost of $3.00. If we switch over to the new masks we would drop our price to $10. Should we do it? Show calculations / explain answer (4 marks)

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

Horngrens Accounting Volume 1

Authors: Tracie Miller Nobles, Brenda Mattison, Ella Mae Matsumura

12th Canadian Edition

0136889373, 9780136889373

More Books

Students also viewed these Accounting questions

Question

Are there any changes you would recommend in the selection process?

Answered: 1 week ago