Abc Toys Company Exercise

Exercise: rudiment Toys company 1. get Variable greet= 3 x750 000=$2,250,000 hold Fixed be= 3x750 000= $3,000,000 administrative Overhead= $1,500,000 in full cost= 6,750,000 tax income= 9x750 000= 6,750,000 Profit= 1.5 x750 000= 0 2. upstanding interchange footing = $9,00per social whole; improver of 10% ? $9,90, sales = 1,000,000-900,000=810,000units beam Variable cost$3x810,000= $2,700,00$3.00 orchestrate Fixed Costs+ $3,000,000$3.00 administrative Overhead+ $1,500,000$1.50 full(a) cost= $6,750,000$8.00 Revenue810,000x$9.9= $8,910,000$9.90 Profit$8,019,000- $6,930,000= $1,710,000$1.90 3. whole selling price = $8.10 per unit; unit sales = 1.1million unit Direct Variable Costs$3x1,100,000= $3,300,000$3.00 Direct Fixed Costs+ $3,000,000$3.00 administrative Overhead+ $1,500,000$1.50 Full cost= $7,800,000$7.09 Revenue1,100,000x$8.

1=$8,910,000$8.10 Profit$1,110,000$1 4. selling implications of each price strategy: If rudiment Toys increases the price to $9.90 and it sales come down (to 810,000units), it leave behind make to a greater extent profit: $1.35 per unit. Otherwise, whether ABC Toys decreases the price to $8.10, it sales increases to 1,100,000units the profit will be less(prenominal) interesting and approximately $1 per unit. To conclude, ABC toys should increase it price, the sales will be less important simply it will make much profit.If you want to get a full essay, order it on our website: Orderessay

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