2. MyAppliance+ is adding a new wine cooler to its appliance product mix. To implement the...
2. MyAppliance+ is adding a new wine cooler to its appliance product mix. To implement the new cooler it will have a fixed cost of $300,000 but the selling price is $150.00 with a variable cost of $89.99. MyAppliance+ wants to make at least $60,000 of profit the first year with this new product. How many wine coolers does the company have to sell to reach this profit goal? ___________________
Homework Answers
Selling price = $150
Less: Variable cost = $89.99
Contribution margin = $60.01
Contribution margin ratio = Contribution margin / selling price = $60.01 / $150 = 0.4000667
Contribution margin ratio = 40.00667%
Desired profit =$60,000
Target sales = (fixed cost + Desired profit) / Contribution margin per unit
Target sales = ($300,000 + $60,000) / $60.01
Target sales = $5999 units
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2. MyAppliance+ is adding a new wine cooler to its appliance
product mix. To implement the...
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To improve control over operations, the president of AP wants to
begin using a flexible budgeting system, rather than use only the
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units.
Variable costs
Manufacturing
$7 per unit
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Selling
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Administrative
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