Answer to Question #310170 in Management for Ethan molla

Question

1. Suppose Mary intends to sell two software products X & Y for the next convention & budgets the following. X Y Total Units Sold. 60 40 100 Revenues, $200 $100 per unit $12,000 $ 4,000 $16,000 Variable Costs, $120 $70 per unit 7,200 2,800 10,000 Unit Contribution Margin, $80 $ 30 per unit $ 4,800 $ 1200 $ 6,000 Fixed Costs 4,500 Operating Income $ 1,500 Required: Required: how-to videotape and a basic equipment set (blocks, stapes, and small pillows). laste year, yegna sold 14,500 videos and 7250 equipment sets. information on the two products is as follows: price of video set and equipment Br. 17.40 and Br. 21.17. variable cost per unit videoset and equpment 5.80 and 8.70. total fixed costs are Br. 101,500. What is the BEP (in units & in Birr. Answer qution 1. What is the sales mix of videos and equipment sets 2. Compute weighted average contribution margin 3. Compute the break-even quantity of each product. 4. What is weighted average contribution margin ratio

Answer 1

Your initial investment is the sum of $5,000 in equity and $5,000 from borrowing, which enables you to buy 200 shares of Telecom stock: nitial investment Stock price = $ , $ = 200 shares The shares increase in value by 10%: $10,000  0.10 = $1,000. You pay interest of = $5,000  0.08 = $400. The rate of return will be: $ － $ $ , = 0.12 = 12% 

The value of the 200 shares is 200P. Equity is (200P – $5,000), and the required margin is 30%. Solving － = 0.30, we get P = $35.71. You will receive a margin call when the stock price falls below $35.71.