Please expain and calcuate in detail (please write out the formulas used for the
ID: 366910 • Letter: P
Question
Please expain and calcuate in detail (please write out the formulas used for the calcuations as well). Thank you, need help
Koala Kare Bears Brother and sister, Carl and Carla Misney, decided to start their own business to to manufacture stuffed animals for children. Carl is the creative force behind the designs and Carla is the supply chain management guru. Together they created a new company called Koala Kare Bears In the first year of operations the company sold 50,000 units of its products. Below is presented the company's sales and cost information. Sales Variable costs Contribution margin Fixed costs Income before taxes Income taxes (32% rate) Net income $800,000 100,000 700,000 560,000 140,000 44,800 195 200= The management duo know that another challenging and competitive year lies ahead of them. Now entering their second year of operations, they are considering two alternatives and have hired your group to help them make some important business decisions.Explanation / Answer
Answer (1) = Compute Contribution Margin per unit under second alternative Total Units (nos) 50,000 Total Sales Value ($) 800,000 Unit Price ($) Total Sale Value / Total Units Unit Price ($) 16 Variable Cost ($) 100,000 Contribution Margin Total Sales value - Variable Cost Contribution Margin 800,000 - 100,000 Contribution Margin 700,000 Contribution per Unit Contribution Margin / Total Units Contribution per Unit 700,000 / 50,000 Contribution per Unit 14 Answer (2) - Company's new contribution ratio Contribution Margin Ratio New Contribution / Old Contribution Contribution Margin Ratio 700,000 / 700,000 Contribution Margin Ratio 1 : 1 Answer (5) - Total Units (nos) 50,000 Total Sales Value ($) 800,000 Unit Price ($) Total Sale Value / Total Units Unit Price ($) 16 Variable Cost 100,000 Fixed Cost (Old) 560,000 Fixed Cost (New) 150,000 Total Cost Variable Cost + Fix Costs Total Cost 100,000 + 560,000 + 150,000 Total Cost 810,000 Let X quantity needed to adjust the negetive amount Unit Price 16 Total Sell Price Total Quantity * Unit Price Total Sell Price X * 16 By 50,000 unit, the net profit is - $ 10000 So Far $ 0 income [X *16 = 10,000 X = 10000 / 16 X = 625 So by additonal 625 quantity, the the earning will comes to $0. Now additonal quantity needed to get the income $200000 We need Y quantity Y * 16 * 68% = 200000 Y = 200000* 100 / (16 *68) Y = 18382.4 Y = 18383 So total quantity needed to get the income $ 200,000 50000 + X + Y 50000 + 625 + 18383 Answer 69007