Question
Virtual Bridal Shoppe sells wedding dresses. The average selling price of each dress is $1,000, variable costs are $400, and fixed costs are $90,000. A)What
Virtual Bridal Shoppe sells wedding dresses. The average selling price of each dress is $1,000, variable costs are $400, and fixed costs are $90,000.
A)What is the Bridal Shoppe's operating income when 200 dresses are sold?
B)How many dresses are sold when operating income is zero and what is the revenue at that point?
C)How many dresses must the Bridal Shoppe sell to yield after-tax net income of $18,000, assuming the tax rate is 40%?
D)Sketch a graph to illustrate the answer in part (B) and show the margin of safety if they expect to sell 200 dresses.
E)Another company approached Virtual Bridal Shoppe to purchase 50 dresses as a special price.What criteria must be satisfied for Virtual Bridal Shoppe to accept that special order and what is the minimum price that she should accept.
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