Sheridan Monograms sells stadium blankets that have been monogrammed with high school and university emblems. The blankets retail for $46 throughout the country to loyal alumni of over 3,800 schools. Sheridan’s variable costs are 42% of sales; fixed costs are $116,000 per month.
Assume that variable costs increase to 47% of the current sales price and fixed costs increase by $11,900 per month. If Sheridan were to raise its sales price by 12% to cover these new costs, what would be the new annual breakeven point in sales dollars?
Solution:
New Variable costs per unit = $46 * 47% = $21.62
New Selling Price = $46*112% = $51.52
Contribution margin per unit = (51.52 - 21.62) / $51.52 = 58.04%
breakeven point in sales dollars = ($116000+$11900) / 58.04% = $220,365
Sheridan Monograms sells stadium blankets that have been monogrammed with high school and university emblems. The...
Sheridan Monograms sells stadium blankets that have been monogrammed with high school and university emblems. The blankets retail for $46 throughout the country to loyal alumni of over 3,800 schools. Sheridan’s variable costs are 42% of sales; fixed costs are $116,000 per month. Sheridan currently sells 124,000 blankets per year. If sales volume were to increase by 15%, by how much would operating income increase?
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Cullumber Monograms sells stadium blankets that have been monogrammed with high school and university emblems. The blankets retail for $45 throughout the country to loyal alumni of over 4,000 schools. Cullumber’s variable costs are 42% of sales; fixed costs are $116,000 per month. Assume that variable costs increase to 45% of the current sales price and fixed costs increase by $12,500 per month. If Cullumber were to raise its sales price by 11% to cover these new costs, what would...
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Sandhill Monograms sells stadium blankets that have been monogrammed with high school and university emblems. The blankets retail for $50 throughout the country to loyal alumni of over 2,100 schools. Sandhill’s variable costs are 41% of sales; fixed costs are $118,000 per month. Assume that variable costs increase to 47% of the current sales price and fixed costs increase by $10,000 per month. If Sandhill were to raise its sales price by 11% to cover these new costs, what would...
Sandhill Monograms sells stadium blankets that have been monogrammed with high school and university emblems. The blankets retail for $50 throughout the country to loyal alumni of over 2,100 schools. Sandhill’s variable costs are 41% of sales; fixed costs are $118,000 per month. Assume that variable costs increase to 47% of the current sales price and fixed costs increase by $10,000 per month. If Sandhill were to raise its sales price by 11% to cover these new costs, what would...