trishann asked:
SCTC makes tony sets consisting of collectible trucks, vans and cars for retail market. The firm is developing a new toy set that includes a battery-powered tractor trailer, complete with cab and trailer; a sports car; and a motorcycle. Each set sells for $100 dollars.
Major Components of SCTC’s annual fixed costs for the toy set. Each component includes the cost of purchases, depreciation, and operating expenses.
SCTC makes tony sets consisting of collectible trucks, vans and cars for retail market. The firm is developing a new toy set that includes a battery-powered tractor trailer, complete with cab and trailer; a sports car; and a motorcycle. Each set sells for $100 dollars.
Major Components of SCTC’s annual fixed costs for the toy set. Each component includes the cost of purchases, depreciation, and operating expenses.
SCTC’s Fixed Costs
Land$44,500
Buildings$392,500
Manufacturing Machinery$572,000
Office Equipment$212,800
Utilities$30,500
Insurance$80,000
Total$1,333,000
SC TC’s variable costs
Labor$15.00
Advertising$1.00
Shipping and receiving $5.00
Total$21.00
What is the fixed costs?
What is the variable costs per unit?
What is the contribution margin?
What is the break-even point for this product?
How many sets does SC TC have to sell before it can start turning a profit?
How would increasing the sale price to $125 dollars affect the break-even point?
Sports Collectibles
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What’s there to figure out – The answer is given -
a) What is the fixed costs?
Total $1,333,000
b) What is the variable costs per unit?
Total $21.00
c) What is the contribution margin?
100 – 21 = $79
d) What is the break-even point for this product?
How many sets does SC TC have to sell before it can start turning a profit?
1333000/79 = 16874 units
e) How would increasing the sale price to $125 dollars affect the break-even point?
1333000/104 = 12818 units