BA102B_2006_Spring_MT1 Solutions_Geyer

BA102B_2006_Spring_MT1 Solutions_Geyer - Units sold Sales...

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This Year Last Year Units sold 200,000 160,000 Sales revenue $1,000,000 $800,000 Less cost of goods sold $700,000 $560,000 Gross margin $300,000 $240,000 Less operating expenses $210,000 $198,000 Net operating income $90,000 $42,000
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5.112 Butler Sales Company 1. Total Fixed Expenses This Year Last Year Change Cost of goods sold $700,000 $560,000 Operating expenses $210,000 $198,000 Total expenses $910,000 $758,000 $152,000 Units sold 200,000 160,000 40,000 Total variable expenses per unit $3.80 This Year Last Year Total expenses $910,000 $758,000 Total variable expenses per unit $3.80 $3.80 Units sold 200,000 160,000 Total variable expenses $760,000 $608,000 Total fixed expenses $150,000 $150,000 2. Contribution Margin for This Year This Year Sales revenue $1,000,000 Total variable expenses $760,000 ($3.80 x 200,000) Contribution margin $240,000
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Current Upgrade Manufacturing costs: Direct material cost per unit $20 $20 Direct labor cost per unit $18 $10 Variable overhead cost per unit $34 $24 Fixed overhead cost in total $43,000 $160,000 Selling and administrative expenses: Variable expense per unit $5 $5 Fixed expense in total $12,000 $12,000
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6.134 Zoran Corporation 1. Breakeven Points Current Upgrade Total fixed expenses $55,000 $172,000 [($43,000 + $12,000), ($160,00 Price $125 $125 Total variable cost per unit $77 $59 [($20 + $18 + $34 + $5), ($20 + Contribution margin per unit $48 $66 Breakeven number of phones 1,146 2,606 2. Indifference Point Current system profit = $48Q - $55,000 Upgraded system profit = $66Q - $172,000 Solve for Q $48Q - $55,000 = $66Q - $172,000
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BA102B_2006_Spring_MT1 Solutions_Geyer - Units sold Sales...

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