Question

In: Accounting

Mel's male accessories sells wallets and money clips. Historically the firms sales have averaged three wallets...

Mel's male accessories sells wallets and money clips. Historically the firms sales have averaged three wallets for every money clip. Each wallet has an R80 contribution margin and each money clip has a R60 contribution margin. Mel's incurs fixed costs in the amount of R180000. The selling prices of wallets and money clips, respectively, are R200 and R150. The firms tax rate is 40%.

Required :
a. How much revenue is needed to break even and how many wallets and money clips does this present.
b. How much revenue is needed to earn an operating income of R150000?

Solutions

Expert Solution

Note:

If you have any queries kindly post a comment, i will solve it earliest.

If you satisfied with my answer, kindly give a thumbs up, it will help to encourage me.

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Describe three (3) key challenges facing multinational firms historically and today.
Describe three (3) key challenges facing multinational firms historically and today.
Picasso Company is a wholesale distributor of packaging equipment and supplies. The company’s sales have averaged...
Picasso Company is a wholesale distributor of packaging equipment and supplies. The company’s sales have averaged about $900,000 annually for the 3-year period 2015–2017. The firm’s total assets at the end of 2017 amounted to $850,000. The president of Picasso Company has asked the controller to prepare a report that summarizes the financial aspects of the company’s operations for the past 3 years. This report will be presented to the board of directors at their next meeting. In addition to...
Value of Information" Firms realize that in order to make money, they have to invest money....
Value of Information" Firms realize that in order to make money, they have to invest money. This can be attributed to the information that the firm relies on. As discussed in the text, there are seven characteristics of useful information. From the first e-Activity and assuming that you are new CFO of Strayer University, identify the top-three characteristics you would rely on the most for improving the profitability of the firm. Provide an example of how each characteristic would directly...
Describe the three types of sales promotion available for firms
Describe the three types of sales promotion available for firms
Accounts Receivable Turnover and Days' Sales in Receivables Quasar, Inc. sells clothing, accessories, and personal care...
Accounts Receivable Turnover and Days' Sales in Receivables Quasar, Inc. sells clothing, accessories, and personal care products for men and women through its retail stores. Quasar reported the following data for two recent years:    Year 2    Year 1 Sales $3,798,190 $3,843,450 Accounts receivable 321,200 306,600 Assume that accounts receivable were $350,400 at the beginning of Year 1. a. Compute the accounts receivable turnover for Year 2 and Year 1. Round to one decimal place. Year 2: Year 1: b. Compute...
Historically, countries have oftentimes been tempted to merely print more money to pay off their debts....
Historically, countries have oftentimes been tempted to merely print more money to pay off their debts. Utilizing your readings in this chapter, address the following points. What might be the impact over time of such practices on the prices of everyday goods and services in these economies? Investigate the Venezuelan economy. What is their current situation with price increases in that country? In other words, what is their inflation picture today? Explain some possible reasons for their situation. In your...
An industry consists of three firms with sales of $205,000, $745,000, and $305,000. a. Calculate the...
An industry consists of three firms with sales of $205,000, $745,000, and $305,000. a. Calculate the Herfindahl-Hirschman index (HHI). Instruction: Enter your response rounded to the nearest integer. b. Calculate the four-firm concentration ratio (C4). c. Based on the FTC and DOJ Horizontal Merger Guidelines described in the text, is the Department of Justice likely to attempt to block a horizontal merger between two firms with sales of $205,000 and $305,000? Yes No
We have three types of firms in the market. Type 1 firms has the total cost...
We have three types of firms in the market. Type 1 firms has the total cost of production as T C1 = Q2 1 + 100 and the fixed cost of production as F C1 = 19. Type 2 firms has the total cost of production as T C2 = Q2 2 + 64 and the fixed cost of production as F C2 = 15. Type 3 firms has the total cost of production as T C3 = Q2 3...
Selected sales and operating data for three divisions of different structural engineering firms are given as...
Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A Division B Division C Sales $ 12,000,000 $ 14,000,000 $ 25,000,000 Average operating assets $ 3,000,000 $ 7,000,000 $ 5,000,000 Net operating income $ 600,000 $ 560,000 $ 800,000 Minimum required rate of return 14 % 10 % 16 % Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover....
Selected sales and operating data for three divisions of different structural engineering firms are given as...
Selected sales and operating data for three divisions of different structural engineering firms are given as follows: Division A Division B Division C Sales $ 12,600,000 $ 35,750,000 $ 20,600,000 Average operating assets $ 3,150,000 $ 7,150,000 $ 5,150,000 Net operating income $ 516,600 $ 572,000 $ 597,400 Minimum required rate of return 9.00 % 9.50 % 11.60 % Required: 1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover....
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT