Question

Question 3 (1 point)

A company believes it can sell 5,500,000 of its proposed new optical mouse at a price of $11.00 each. There will be $8,000,000 in fixed costs associated with the mouse. If the company desires to make a profit $2,000,000 on the mouse, what is the target variable cost per mouse?

Round to two decimal places.

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Answer

Question 4 (1 point)

Wizard Corporation has analyzed their customer and order handling data for the past year and has determined the following costs:
Order processing cost per order	$7
Additional costs if order must be expedited (rushed)	$8.00
Customer technical support calls (per call)	$12
Relationship management costs (per customer per year)	$1200
In addition to these costs, product costs amount to 75% of Sales.
In the prior year, Wizard had the following experience with one of its customers, Chester Company:
Sales	$16,000
Number of orders	160
Percent of orders marked rush	70%
Calls to technical support	80
Required:
Calculate the profitability of the Chester Company account.

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Answer

Answer 1

5500000*11 Sales Value Fixed Costs Desired profit Variable Costs $ 6,05,00,000.00 $ 80,00,000.00 $ 20,00,000.00 $ 5,05,00,000.00 60500000-8000000-2000000 Variable cost per Unit = 50500000/5500000 $ 9.18