Question

Assume that Bay King Products sells three varieties of canned seafood with the following prices costs: Selling Price per Case $125 $150 $100 Variable Cost per Case $95 100 Fixed Cost per Month Premium Royal Deluxe Entire firm 80 $246,500 The sales mix (in cases) is 30% Premium, 20% Royal, and 50% Deluxe. Required What is the weighted average contribution margin? 2. What is the break even point in total monthly sales units? 3.What is the breakeven point in sales revenues? 4. How many total units do they need to sell to earn $20,000 per month? 5. If the tax rate is 20% how many total units do they need to sell to earn $20,000 after-tax? 6.Total sales average 9,000 cases per month and range seasonally from 8,000 to 10,000 cases. What is the expected annual profit before taxes? Bay King's General Manager believes an advertising campaign costing $150,000 annually would increase monthly sales by 600 total cases per month. What would be the annual profits before taxes if Bay King undertook this investment? 7. 8. Due to a change in market conditions the variable cost of a case of the Royal product is expected to 9.Base your answer on the original data for Bay King. If labor cost increases cause the cost of all products 10. In order to address the decline in profits resulting from the increased labor costs described in question 9 increase by 15%. What will the weighted average contribution margin equal if this change occurs? to increase by two dollars per case what is the new expected level of monthly profits before taxes? Bay King is considering increasing the price of all products by three dollars per case. They expect the impact of this across the board price increase to be a decrease in the average number of total cases sold per month. Given the changes to costs and prices, how many cases per month must they sell to earrn profits equal to their original monthly profits based on 9,000 total cases?

Answer 1

As HOMEWORKLIB instructions, answered first 4 questions.