View the step-by-step solution to:

Question

Below is a question I have in my accounting homework from my Professor. I am stumped on how to prepare the budget

without having the estimated amount of packages that delivery service plans to deliver per month. I know this can be used to compute break-even but the question requires a budget projection. Am I missing something?


Speedy Delivery currently delivers packages for $9 each. The variable cost is $3 per package, and fixed costs are $60,000 per month. Project a budget showing the expected current profit and profit after the changes in costs.                                                                                                                                                       1. Fixed costs are increased to $75,000.

2. Selling price is increased by 10%.

3. Variable cost is increased to $4.50 per unit.

4. Show the analysis in a table format.

Top Answer

View the full answer
Budget.png

Particulars
Current Figure
Budgeted Figure
Estimated delivery packages per month (Say)
100000
100000
Selling Price Per Package (A)
$9
$9*1.1 = $9.90
Variable cost per package ( B)
$ 3
$4.50...

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online