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Required information Exercise 3 - 3 3 and 3 - 3 4 ( Algo ) ( LO 3 - 1 ) [ The following information
Required information
Exercise and AlgoLO
The following information applies to the questions displayed below.
Charlevoix Cases makes mobile phone cases. The company has collected the following price and cost characteristics:
Exercise Algo Basi
Required information
Exercise and AlgoLO
The following information applies to the questions displayed below.
Charlevoix Cases makes mobile phone cases. The company has collected the following price and cost characteristics:
Exercise Algo Basic Decision Analysis Using CVP LO
Required:
a How many cases must Charlevoix sell annually to break even?
Note: Do not round intermediate calculations. Round final answer to nearest whole unit.
b How many cases must Charlevoix sell annually to make an operating profit of $
Note: Do not round intermediate calculations. Round final answer to nearest whole unit.
a Breakeven sales in units
b Number of units to be soldc Decision Analysis Using CVP LO
Required:
a How many cases must Charlevoix sell annually to break even?
Note: Do not round intermediate calculations. Round final answer to nearest whole unit.
b How many cases must Charlevoix sell annually to make an operating profit of $
Note: Do not round intermediate calculations. Round final answer to nearest whole unit.
a Breakeven sales in units
b Number of units to be sold
Required information
Exercise and AlgoLO
The following information applies to the questions displayed below.
Charlevoix Cases makes mobile phone cases. The company has collected the following price and cost characteristics:
Exercise Algo Basic Decision Analysis Using CVP LO
Assume that the company plans to sell units annually. Consider requirements bc and d independently of each other.
Required:
a What will be the operating profit?
b What is the impact on operating profit if the sales price decreases by percent? Increases by percent?
Note: Do not round intermediate calculations.
c What is the impact on operating profit if variable costs per unit decrease by percent? Increase by percent?
Note: Do not round intermediate calculations.
d Suppose that fixed costs for the year are percent lower than projected and variable costs per unit are percent higher than
projected. What impact will these cost changes have on operating profit for the year? Will profit go up Down? By how much?
Note: Do not round intermediate calculations.
Complete this question by entering your answers in the tabs below.
What will be the operating profit?
Problem Algo CVP Operating Leverage, and Margin of Safety Percentage LO
Miami Training Support MTS produces materials for companies to use for training new hires as well as advanced training for
employees who have been promoted to new positions. Most of the material has been created and produced by Miami employees.
There is some unique content, however, and that material differentiates the company from competitors. MTS includes this content in all
its courses. This content was created and produced by one of the founders of MTS who is about to leave the company. As a part of
the compensation agreement to be signed, MTS may continue to use the unique content, but must pay the founder the original
creator a royalty. Majy of the details have been decided, but some specific issues need to be resolved. MTS is looking to you for
advice on how to structure the agreement.
Specifically, MTS is considering two options for paying the royalty. The first is course based, where MTS will pay the founder $ for
each of the courses sold. The second is a flat, annual fee of $ for the use of the material in any of its course. The royalty
agreement will run one year and the royalty option chosen cannot be changed during the agreement. All other royalty terms are the
same.
MTS charges $ for a training course. The variable costs for a course excluding any royalty is $ Annual fixed costs
excluding any royalties are $
Required:
a What is the annual breakeven level in terms of courses sold assuming
The coursebased royalty agreement?
The flatrate royalty agreement?
b At what annual volume would the operating profit be the same regardless of the royalty option chosen?
c Suppose MTS is unsure of the pricing and costs for its courses other than the costs of the royalty payments under the two options
At what annual volume would the operating profit be the same regardless of the royalty option chosen?
d Assume an annual volume of courses. What is the operating leverage assuming
The coursebased royalty agreement?
The flatrate royalty agreement?
e Assume an annual volume of se
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