Exercise 3 The Steel Shelf Company has the following operating costs: Rent $3,000 per month Utilities...
Exercise 3
The Steel Shelf Company has the following operating costs:
Rent $3,000 per month
Utilities 1,100 per month
Insurance 1,500 per quarter
Property Taxes 6,000 per year
Steel $9.00 per shelf
Labor $1.00 per shelf
Sales Price $20.00 per shelf
1-What is the company’s variable cost per unit?
2-How many units per month does Steel Shelf Company need to sell to break even?
3-What is Steel’s contribution margin as a percentage of each dollar of sales?
4-If the company wants to earn a profit of $4,000 in a month, how many units do they need to sell?
5-If the price of steel increases by $1 for each
shelf, insurance costs rise to $1,800 per quarter, and increased
competition forces them to lower the sales price to $18.00 per
shelf, how many units permonth will Steel now need to sell to
break even?
Please answer all 5 questions.
Homework Answers
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Exercise 3
The Steel Shelf Company has the following operating
costs:
Rent $3,000 per month
Utilities...
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