Week 2

Part 1

Sterling makes nylon climbing ropes, sold through REI. A 40m-foot rope costs the manufacturer $17.36 to produce. Sterling sells the rope directly to REI for $73.95. Fixed costs at Sterling associated with this rope are $225,000. (a) What is the CPU? $62.13 $56.59 $49.11 $45.40

Part 2

1. Sterling makes nylon climbing ropes, sold through REI. A 40m-foot rope costs the manufacturer $17.36 to produce. Sterling sells the rope directly to REI for $73.95. Fixed costs at Sterling associated with this rope are $225,000.

   (b) What is the CM? (Show to two (2) decimal places.)

   		81.53%
   		85.13%
   		65.23%
   		76.52

Part 3

1. Sterling makes nylon climbing ropes, sold through REI. A 40m-foot rope costs the manufacturer $17.36 to produce. Sterling sells the rope directly to REI for $73.95. Fixed costs at Sterling associated with this rope are $225,000.

   (c) What is the BEP_$ using BEP_units x SP?

   		$294,025
   		$313,894
   		$357,448
   		$212,087

Part 4

1. Sterling makes nylon climbing ropes, sold through REI. A 40m-foot rope costs the manufacturer $17.36 to produce. Sterling sells the rope directly to REI for $73.95. Fixed costs at Sterling associated with this rope are $225,000.

   (d) What is the BEP_$ using CM to directly compute sales?

   		$294,041
   		$362,912
   		$287,555
   		$375,654