Module 8 Assignment Fit To Be Tied sells ties for $25. The ties are purchased for $15 from the…


Question Description:

25

Module 8 Assignment Fit To Be Tied sells ties for $25. The ties are purchased for $15 from the… 1 answer below » Module 8 Assignment Fit To Be Tied sells ties for $25. The ties are purchased for $15 from the supplier. Fixed costs are budgeted at $4,000 per month for sales volumes between 0 and 1,000 units. Fit To Be Tied has been selling 500 ties per month. Requirements: A Determine the monthly breakeven sales in units and dollars. Breakeven sales in units = units Breakeven sales in dollars = B If the target profit is $3,500, what monthly sales level is needed to reach this goal? Units to reach target profit of $3,500 = C units Calculate Fit To Be Tied’s current margin of safety in units, View complete question » Module 8 Assignment Fit To Be Tied sells ties for $25. The ties are purchased for $15 from the supplier. Fixed costs are budgeted at $4,000 per month for sales volumes between 0 and 1,000 units. Fit To Be Tied has been selling 500 ties per month. Requirements: A Determine the monthly breakeven sales in units and dollars. Breakeven sales in units = units Breakeven sales in dollars = B If the target profit is $3,500, what monthly sales level is needed to reach this goal? Units to reach target profit of $3,500 = C units Calculate Fit To Be Tied’s current margin of safety in units, in sales dollars and as a percentage. Explain what these calculations tell us about Fit To Be Tied. Margin of safety in units = units Margin of safety in dollars = Margin of safety as a percentage = D At Fit To Be Tied’s current level of sales, what is its operating leverage factor? If sales volume decreases by 5%, what will happen to operating income? Operating leverage factor = E If Fit To Be Tied decreases its sales price to $20 to remain competitive, what happens to Fit To Be Tied’s breakeven point? F Fit To Be Tied has decided to expand its product line to include dress socks. A pair of dress socks will sell for $12 and have a cost of $3. Fixed costs will not change and for every tie that is sold at the decreased sales price of $20, it is expected that 3 pairs of dress socks will be sold. Calculate Fit To Be Tied’s weighted­average contribution margin per unit and determine the number of units of each product it must sell to break even. Weighted­average contributon margin per unit = Breakeven sales of ties = ties Breakeven sales of dress socks = dress socks Attachments: Q.-Attachment….xlsx View less » Sep 07 2015 03:58 PM

Answer

25