FIN419 Week5 Text

# FIN419 Week5 Text - Problem1:

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Mike Smith wanted to open up a baseball hat shop. He needs to know how many hats tha The stores fixed costs for the year are estimated at \$85,000. He is planning on selling the a) Find the operating breakeven point in number of hats. Q = FC = \$85,000  = \$85,000  = P - VC \$20 - \$10.50 \$9.50 b) What is the total operating costs at the breakeven volume found in a. Total Operating cost = FC + Q x Total Operating cost = \$85,000  + 8,947 x Total Operating cost = \$85,000  + \$93,943.50  Total Operating cost = \$178,943.50  c) A marketing firm is estimating that he will be able to sell an average of 1000 hats per mon 1,000 x 12 = 12,000 1,000 hats per month exceeds the operating breakeven point by 3,053 units per year.  Mik d) What will be the EBIT per month if Mike sells 1000 hats? EBIT

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## This note was uploaded on 08/22/2011 for the course BUS 415 taught by Professor Barnes during the Spring '11 term at Coastal Carolina University.

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FIN419 Week5 Text - Problem1:

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