Break even point = Fixed costs/Contribution Margin per unit
= 1400/(0.25-0.04-0.05)
= 8,750 pages
New commission based = 0, since no fixed cost
2.Corrover point = Difference in fixed cost/Difference in variable cost
= 1400/(0.05-0) = 28,000 pages
The fixed lease agreement will be preferred for sales over 28000 pages
Upto 28000 pages – commission based
3.Profit
Pages |
Fixed lease |
Commission based |
17500 |
1400 |
1925 |
27500 |
3000 |
3025 |
37500 |
4600 |
4125 |
47500 |
6200 |
5225 |
57500 |
7800 |
6325 |
Total |
23000 |
20625 |
Average |
4600 |
4125 |
Expected Value of fixed lease = $4,600
Commission based = $4,125
Fixed lease should be chosen
Flexo Printing Company currently leases its only copy machine for $1,400 a month. The company is...
Flexo Printing Company currently leases its only copy machine for $1,400 a month. The company is considering replacing this leasing agreement with a new contract that is entirely commission based. Under the new agreement, Flexo would pay a commission for ils printing at a rate of $25 for every 500 pages printed. The company currently charges $0.25 per page to its customers. The paper used in printing costs the company $0.04 per page and other variable costs, including hourly labor,...
Flexo Printing Company currently leases its only copy machine for $1,400 a month. The company is considering replacing this leasing agreement with a new contract that is entirely commission based. Under the new agreement Flexo would pay a commission for its printing at a rate of $25 for every 500 pages printed. The company currently charges $0.25 per page to its customers. The paper used in printing costs the company $0.04 per page and other variable costs, including hourly labor,...
Blueline Printing Company currently leases its only copy machine for $1,500 a month. The company is considering replacing this leasing agreement with a new contract that is entirely commission based. Under the new agreement, Blueline would pay a commission for its printing at a rate of $25 for every 500 pages printed. The company currently charges $0.32 per page to its customers. The paper used in printing costs the company $0.02 per page and other variable costs, including hourly labor,...
Bristol Printing Company currently leases its only copy machine for $1,200 a month. The company is considering replacing this leasing agreement with a new contract that is entirely commission based. Under the new agreement, Bristol would pay a commission for its printing at a rate of $10 for every 500 pages printed. The company currently charges $0.19 per page to its customers. The paper used in printing costs the company $0.06 per page and other variable costs, including hourly labor,...
Please help me to do requirement 3
Integral Printing Company currently leases its only copy machine for $2.000 a month. The company is considering replacing this leasing agreement with a new contract that is entirely commission based. Under the new agreement, Integral would pay a commission for its printing at a rate of $10 for every 500 pages printed. The company currently charges $0.21 per page to its customers. The paper used in printing costs the company $0.01 per page...
Composite Printing Company currently leases its only copy machine for $1,700 a month. The company is considering replacing this leasing agreement with a new contract that is entirely commission based. Under the new agreement, Composite would pay a commission for its printing at a rate of $25 for every 500 pages printed. The company currently charges $0.30 per page to its customers. The paper used in printing costs the company $0.02 per page and other variable costs, including hourly labor,...
CrossoverCrossover Printing Company currently leases its only copy machine for $ 1 comma 800$1,800 a month. The company is considering replacing this leasing agreement with a new contract that is entirely commission based. Under the new agreement, CrossoverCrossover would pay a commission for its printing at a rate of $ 10$10 for every 500 pages printed. The company currently charges $0.250.25 per page to its customers. The paper used in printing costs the company $ 0.06$0.06 per page and other...
Bristol Printing Company currently leases its only copy machine for $1,200 a month. The company is considering replacing this leasing agreement with a new contract that is entirely commission based. Under the new agreement, Bristol would pay a commission for its printing at a rate of $20 for every 500 pages printed. The company currently charges $0.32 per page to its customers. The paper used in printing costs the company $0.11 per page and other variable costs, including hourly labor,...
Crossover Printing Company currently leases its only copy
machine for $1,300 a month. The company is considering replacing
this leasing agreement with a new contract that is entirely
commission based. Under the new agreement, Crossover would pay a
commission for its printing at a rate of $10 for every 500 pages
printed. The company currently charges 0.21 per page to its
customers. The paper used in printing costs the company $0.04 per
page and other variable costs, including hourly labor,...
Just need help with requirement
3 please! thank you
Deckle Printing Company currently leases its only copy machine for $1,800 a month. The company is considering replacing this leasing agreement with a new contract that is entirely commission based. Under the new agreement, Deckle would pay a commission for its printing at a rate of $10 for every 500 pages printed. The company currently charges $0.21 per page to its customers. The paper used in printing costs the company $0.07...