Big Chill Inc sells portable dehumidifier units at the curre

Big Chill, Inc. sells portable dehumidifier units at the current price of $170. Unit variable costs are $74. Fixed costs, made up primarily of salaries, rent, insurance and advertising, are $4,177,000. Calculate breakeven sales for Big Chill, Inc. Round your answer to the nearest whole number.

Big Chill, Inc. sells portable dehumidifier units at the current price of $119. Unit variable costs are $82. Fixed costs, made up primarily of salaries, rent, insurance and advertising, are $3,608,000. Management is considering a price decrease of $16. Calculate the increase or decrease in unit sales necessary to breakeven on the price change. Round your answer to the nearest whole number.

Big Chill, Inc. sold 152,505 portable dehumidifier units at $127. Unit variable costs were $84. Fixed costs were $4,060,600. At this price and volume, what was the firm\'s return on sales? Report your answer as a percentage and round to the nearest whole number.

Solution

1)

price of each unit = 170

varabile cost per unit = 74

fixed costs = 4177000

for break even sales , profit is zeero

let x be the units to be sell for break even

profit = sales - total costs

=> 170 *x - 74 *x - 4177000 =0

x = 43510.41667

break even sales = 43510.41667 * 170 = 7396771

2)

price of each unit = 119

varabile cost per unit = 82

fixed costs = 3608000

for break even sales , profit is zeero

let x be the units to be sell for break even

profit = sales - total costs

=> 119 *x - 82 *x - 3608000 =0

x = 97513.5

new price = 119 -16 = 10

new y break even units

profit = sales - total costs

=> 103 *x - 82 *x - 3608000 =0

x = 171809.5

change in unit sales = 171809 - 97513 = 74296 (increase)

3)

No of units sold = 152505

price of each unit = 127

variable cost per unit = 84

fixed costs = 4060600

sales = 152505 * 127 = 19,368,135

profit = 152505 * (127 -84) - 4060600 = 2,497115

return on sale = profit/sales * 100

= 2,497115/19,368,135 *100

= 13%