3310solmod06

# 3310solmod06 - \$70X = \$210,000 \$210,000 X = \$70 X = 3,000...

This preview shows pages 1–3. Sign up to view the full content.

Module 6 Answers 3-5. Costs that are “fixed in the short run” are usually not fixed in the long run. In fact few, if any, costs are fixed over a very long time horizon. 3-6. A sunk cost has taken place in the past and cannot be changed. A differential cost is one that will change with a given decision. 3-32. (20 min.) Basic Decision Analysis Using CVP: Anu’s Amusement Center a. \$255,000 ÷ 30,000 tickets = \$8.50 per ticket b. \$135,000 ÷ 30,000 tickets = \$4.50 per ticket c. (\$8.50 – \$4.50) = \$4.00 per ticket d. π = (\$8.50 – \$4.50)X – \$80,000 Let π = 0 0 = (\$8.50 – \$4.50)X – \$80,000 \$80,000 X = \$4.00 X = 20,000 tickets e. Let π = \$75,000 \$75,000 = (\$8.50 – \$4.50)X – \$80,000 \$80,000 + \$75,000 X = \$4.00 X = 38,750 tickets

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
3-34. (25 min.) CVP Analysis—Planning and Decision Making: T-Tunes a. π = (P – V)X – F \$0 = (\$150 – \$80)X – \$210,000
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: \$70X = \$210,000 \$210,000 X = \$70 X = 3,000 units b. π = (P – V)X – F \$140,000 = (\$150 – \$80)X – \$210,000 \$70X = \$350,000 \$350,000 X = \$70 X = 5,000 units 3-35. (30 min.) CVP analysis—Planning and Decision making: T-Tunes a. π = (\$150 – \$80) × 6,500 – \$210,000 = \$245,000 . b. 10% price decrease. Now P = \$135 π = (\$135 – \$80)6,500 – \$210,000 = \$147,500 . π decreases by \$97,500 20% price increase. Now P = \$180 π = (\$180 – \$80)6,500 – \$210,000 = \$440,000 . π increases by \$195,000 c. 10% variable cost decrease. Now V = \$72 π = (\$150 – \$72)6,500 – \$210,000 = \$297,000 . π increases by \$52,000 20% variable cost increase. Now V = \$96 π = (\$150 – \$96)6,500 – \$210,000 = \$141,000 . π decreases by \$104,000 d. π = (\$150 – \$88)6,500 – \$189,000 = \$214,000 . π decreases by \$31,000...
View Full Document

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern