Prem Narayan, a graduate student in engineering, to market a radical new speaker he had designed for automobile sound systems, founded Acoustic Concepts, Inc. Prem established the company’s headquarters into rented quarters in a nearby industrial park. He hired a receptionist, an accountant, a sales manager, and a small sales staff to sell the speakers to retail stores. Prem asked his accountant, Bob Luchinni, to prepare several cost-volume-profit analyses, using the information shown below.

Sales price for one speaker set................................................... $250 Variable manufacturing cost for each speaker set (direct
materials) ................................................................................... $150 Fixed expenses per month (rent, salaries of receptionist, sales

people, accountant, and Prem)................................................... $35,000 Number of speaker sets sold per month..................................... 400

Based on the above information, how many stereo speaker sets will need to be sold for Acoustic Concepts, Inc., to break even for one month?

Based on the above information, how many stereo speaker sets will need to be sold for Acoustic Concepts, Inc., to earn a $1,000 profit for one month?

What will be the net income or net loss for one month if 400 speaker sets are sold? How about if 425 speakers are sold?

The sales manager feels that a $10,000 increase in monthly advertising will increase monthly sales by $30,000. Would you recommend increasing the advertising budget?

Prem and other management personnel are considering the use of higher-quality components, which would increase variable costs by $10 per speaker. However, the sales manager predicts that the higher overall quality would increase sales to 480 speaker sets per month. Should the higher quality components be used?

The sales manager believes that by reducing the selling price of speakers by $20, and also by increasing the advertising budget by $15,000 per month, that sales will increase to 600 speaker sets per month. Should the changes be made?

The sales manager would like to place the sales staff on a commission basis of $15 per speaker sold, rather than on flat salaries that now total $6,000 per month. The sales manager is confident that the change will increase monthly sales to 460 speaker sets per month. Should the change be made?

Suppose Acoustic Concepts has an opportunity to make a bulk sale of 150 speakers to a wholesaler, if an acceptable price can be worked out. The sale would not disturb the company’s regular sales, nor would if affect fixed operating costs per month. What price should be quoted to the wholesaler if Acoustic Concepts wants to increase its monthly profits by $3,000?

 C.M.=contribution margin, S.P.=sales price, V.C.=variable cost, F.C.=fixed cost

 C.M. per unit = S.P. per unit – V.C. per unit

 The break even point is the point at which the total contribution margin equals fixed costs.

 Break even units sold = F.C. / C.M. Per unit

 Break even sales dollars = F.C. / C.M. Percentage

 C.M. Percentage = C.M. per unit / S.P. per unit, or C.M. (total) / Sales (total)

For a monopoly, profit per unit of output is?

A-marginal revenue minus marginal cost

B-price minus average total cost

C-average total cost minus marginal revenue

D-price minus marginal revenue

E-total revenue minus total cost

High-Low and Cost Formula

Harrison Company has accumulated the following total manufacturing overhead costs for two levels of activity (within the relevant range):

The total overhead cost includes variable, fixed, and mixed costs. At 130,000 direct labor hours, the total cost breakdown is as follows:

a. Using the high-low method of cost analysis, determine the variable portion of the semi-variable cost per direct labor hour. Determine the total fixed cost component of the mixed cost.

Isolate mixed costs:

Do not use negative signs with your answers.

High-Low Analysis:
Round variable portion per unit to two decimal places, if applicable.

Variable portion per unit: $Answer

b. What should the total planned overhead cost be at 115,000 direct labor hours?

Total planned overhead for 115,000 direct labor hours $Answer

High-Low and Cost Formula

Adams Company has accumulated the following total manufacturing overhead costs for two levels of activity (within the relevant range):

The total overhead cost includes variable, fixed, and mixed costs. At 50,000 direct labor hours, the total cost breakdown is as follows:

a. Using the high-low method of cost analysis, determine the variable portion of the semi-variable cost per direct labor hour. Determine the total fixed cost component of the mixed cost.

Isolate mixed costs:

High-Low Analysis:
Round variable portion per unit to two decimal places, if applicable.

Variable portion per unit $Answer

b. What should the total planned overhead cost be at 40,000 direct labor hours?

Total planned overhead for 40,000 direct labor hours $Answer

A company produces at an output level where marginal cost is equal to marginal revenue and has the following revenue and cost levels:
Total revenue = $1,450
Total cost = $1,500
Total variable cost = $1,300
What would you suggest?

1. Complete the table below by computing and filling in the missing values for (a) Avg. fixed Cost, (b) Avg. Variable cost, (c) Total Cost, (d) Avg. Total Cost, (E) Marginal cost

2. If Price = $20, quantity = 400 units, unit cost = $15, implicit costs = $4,000.

What does economic profit equal?

1. What are the hopes for economic integration in the Americas among those who  advocate free trade agreements?

2. Do you think that such hopes can come to fruition in the near future? Why?

Q: zero intrest rate may result volatility in currency markets, what may happen to the US dollar vs other currencies in the near future, explain your answers with details necessary