Question

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PROBLEMS: 1. V Boutique is a fashion house that designs, manufactures, and sells evening gowns. Their lowest-selling design is a vibrant green strapless gown in Dupioni silk. V Boutique is considering lowering the selling price of the gown to stimulate demand. However, before lowering the price, they must evaluate the total costs associated with the gown. • Fabric and materials - $62/gown • Labor to construct the gown - $40/gown • Equipment cost for these gowns (steamer and sewing machines) - $3,000 V Boutique anticipates selling 500 gowns after lowering the selling price. Assuming their projection is accurate, what is the total average cost they will incur per gown? Mickey estimates that the fixed costs associated with opening his photography studio are $40,000. He expects the studio to book 260 sessions in the first year, each of which will cost him $50 to service. He estimates the studio will generate $91,000 in revenue. For Mickey, the total cost of opening his photography studio and staying in business for one year will be: Lumos Lighting sells a lamp kit for making personalized lighting. The company sells each lamp kit for $22. The average variable cost for each lamp kit is $13, and the total annual fixed cost for plant operation is $78,300. What is the break-even point in units? 4. If the fixed costs of manufacturing a new cell phone are $10,000, the sales price is $60, and the variable cost per unit is $20, the break-even point is how many units: 5. Fisher's Bakery is a new competitor of Insomnia Cookies in town. The bakery sells delicious cookies especially Abe's 3Cs (chocolate, chip, and caramel). The total annual fixed cost for the bakery is $25,000, and the variable cost per unit is $2.00. If the sales price per cookie is $6.00, what is the break-even point in units?

Answer 1

f SUM(D4:D7) D8 A В C D E 1 2 Cost per Gown 1 Fabric and Materials Labor $ 62.00 5 40.00 |3000/500 $ Depreciation 6 6.00 7 Total Average Cost $ 108.00 10