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chapter_3

# Increased by 20 percent approaching college

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Unformatted text preview: . . Variable costs (tiles, supplies, and so on) . . . . . . Fixed costs (advertising, salaries, and so on) . . . . . . . . . . . \$ 400 per student 240 per student 80,000 per year CHAPTERS IN PART ONE Required a. What enrollment will enable Alameda Tile to break even? 1 Making an operating proﬁt of \$40,000 for the b. How many students will enable Alameda Tile to makeYourself Successful in College year? c. Assume that the projected enrollment for the year is 800 students for each of the following 2 Approaching College Reading and (considered independently): Developing 1. What will be the operating proﬁt (for 800 students)? a College-Level Vocabulary 2. What would be the operating proﬁt if the tuition per student (that is, sales price) decreased by 10 percent? Increased by 20 percent? Approaching College Assignments: 3. What would be the operating proﬁt3if variable costs per student decreased by 10 percent? Reading Textbooks and Following Directions Increased by 20 percent? 4. Suppose that ﬁxed costs for the year are 10 percent lower than projected, whereas variable costs per student are 10 percent higher than projected. What would be the operating proﬁt for the year? (L.O. 4) 3-41. Extensions of the CVP Model—Semiﬁxed (Step) Costs Sam’s Sushi serves only a ﬁxed-price lunch. The price of \$10 and the variable cost of \$4 per meal remain constant regardless of volume. Sam can increase lunch volume by opening and stafﬁng ✓ Related Resources additional check-out lanes. Sam has three choices: Monthly Volume Range (Number of Meals) 1 Lane . . . . . . . . . . . 2 Lanes . . . . . . . . . 3 Lanes . . . . . . . . . Total Fixed Costs 0–5,000 5,001–8,000 8,001–10,000 \$33,000 39,000 52,500 See pages 000 to 000 of the Annotated Instructor’s Edition for general suggestions related to the chapters in Part One. Required a. Calculate the break-even point(s). b. If Sam can sell all the meals he can serve, should he operate at one, two, or three lanes? cor50782_ch01_001-072.indd 1 Support your answer. lan27114_ch03_080-109.indd 102 1 10/5/09 11:09:29 PM 10/22/09 10:34:03 PM REVISED PAGES Chapter 3 Fundamentals of Cost-Volume-Profit Analysis 1 3-42. Extensions of the CVP Model—Semiﬁxed (Step) Costs PART Cesar’s Bottlers bottles soft drinks in a factory that can operate either one shift, two shifts, or three shifts per day. Each shift is eight hours long. The factory is closed on weekends. The sales price of \$2 per case bottled and the variable cost of \$0.90 per case remain constant regardless of volume. Cesar’s Bottlers can increase volume by opening and stafﬁng additional shifts. The company has the following three choices: 103 (L.O. 4) Orientation Daily Volume Range Total Fixed Costs (Number of Cases Bottled) per Day 1 Shift . . . . . . . . . . . 2 Shifts . . . . . . . . . . 3 Shifts . . . . . . . . . . (0–2,000) (2,001–3,600) (3,601–5,000) \$1,980 3,740 5,170 Preparing and Organizing Yourself Required for Success in College a. Calculate the break-...
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