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Culley Week 3 Homework

# Culley Week 3 Homework - The third weeks homework...

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Chapter 5; Page 142 #5, #6. Page 143, #10. Page 144, #13, #14. Chapter 6, Page 182 #3. Page 183, #5, #7. Page 184, #9, #10. Pg 142 5 a Break-even = Fixed cost / Contribtion per unit Contribution per unit = selling price per unit - variable cost per \$200,000 /(56-31) = 8000 b  \$150,000  /(56-34) = 6818 c (Contribution/sales)x 100 Old Contribution margin ratio = (25/56)x100 = New Contribution margin ratio = (22/56)x100 = The old plan sales are high  and would be the best choice under this plan. 6 Jay Linoleum Before= FC =  \$70,000.00  = P-VC  \$4.00-\$2.60  After= FC =  \$105,000.00  = P-VC  \$4.00-\$2.25  The break-even point will g pg143 10 Sterling Tire Company Sales (20000 tires at \$60)  \$1,200,000       Less: Variable costs (20000 tires at\$30)  \$600,000            Fixed Cost  \$400,000  Earnings before intrest and taxes (EBIT)  \$200,000  Intrest expense  \$50,000  Ernings before taxes (EBT)  \$150,000  Income tax expense (30%)  \$45,000  Earnings after taxes (EAT)  \$105,000  a Degree of operating leverage 3.00x The third week’s homework assignment – This assessment covers break-even, financial leve operating leverage, external financing, monthly financing, interest expense, production, cash

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b Degree of finachal levarage 1.33x c Degree of combined levarge 4X d Break-even point in units 13,333 Units Q=\$20,000 P=\$60
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Culley Week 3 Homework - The third weeks homework...

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