Question

Larson, Inc., manufactures backpacks. Last year, it sold 108,500 of its basic model for $20 per unit. The company estimates that this volume represents a 35 percent share of the current market. The market is expected to increase by 20 percent next year. Marketing specialists have determined that as a result of new competition, the company’s market share will fall to 30 percent (of this larger market). Due to changes in prices, the new price for the backpacks will be $17 per unit. This new price is expected to be in line with the competition and have no effect on the volume estimates.

**Required:**

Estimate Larson’s sales revenues from this model of backpack for the coming year.

Sales Revenue:

Answer #1

Larson, Inc., manufactures backpacks. Last year, it sold 99,000
of its basic model for $15 per unit. The company estimates that
this volume represents a 30 percent share of the current market.
The market is expected to increase by 15 percent next year.
Marketing specialists have determined that as a result of new
competition, the company’s market share will fall to 25 percent (of
this larger market). Due to changes in prices, the new price for
the backpacks will be...

Luxvano Co. produced and sold 65,000 units during the year at an
average price of $20 per unit. Variable manufacturing costs were $9
per unit, and variable marketing costs were $3 per unit sold. Fixed
costs amounted to $220,000 for manufacturing and $80,000 for
marketing. There was no year-end work-in-process inventory. Assume
the income tax rate of 40%.
d. Compute the sales units required to earn a net income (income
after taxes) of $120,000 during the year.
e. If Luxvano’s...

Question) UTS Merchandise Pty Ltd has estimated that the
budgeted production and sales of its university backpacks during
the coming year will be 40,000 units at an average price of $60 per
unit. Variable manufacturing costs are estimated to be $24 per
unit, and variable marketing costs $12 per unit sold. Fixed costs
are expected to amount to $360,000 for manufacturing and $144,000
for marketing. If the variable manufacturing costs are 20% higher
than budgeted, calculate the selling price that...

Luxvano Co. produced and sold 65,000 units during the year at an
average price of $20 per unit. Variable manufacturing costs were $9
per unit, and variable marketing costs were $3 per unit sold. Fixed
costs amounted to $220,000 for manufacturing and $80,000 for
marketing. There was no year-end work-in-process inventory. Assume
the income tax rate of 40%. REQUIRED: (Show your detailed
computations!)
a. Compute Luxvano’s break-even point in sales dollars for the
year.
b. Compute the margin of safety...

Last year Minden Company introduced a new product and sold
25,700 units of it at a price of $96 per unit. The product's
variable expenses are $66 per unit and its fixed expenses are
$833,100 per year.
Required:
1. What was this product's net operating income (loss) last
year?
2. What is the product's break-even point in unit sales and
dollar sales?
3. Assume the company has conducted a marketing study that
estimates it can increase annual sales of this...

For years, Tamarindo Company produced only one product:
backpacks. Recently, Tamarindo added a line of duffel bags. With
this addition, the company began assigning overhead costs by using
departmental rates. (Prior to this, the company used a
predetermined plantwide rate based on units produced.)
Surprisingly, after the addition of the duffel-bag line and the
switch to departmental rates, the costs to produce the backpacks
increased, and their profitability dropped. Josie, the marketing
manager, and Steve, the production manager, both complained...

Dividends discount model:
The MBS Corporation’s dividends per share are expected to grow
indefinitely by 5% per year.
DDa. If
this year-end dividend is $8 and the market capitalization rate is
10% per year, what must the current stock price be according to the
DDM (Dividends Discounting Model)?
DDb. If the
expected earnings per share are 12$, what is the implied value of
the ROE on future investment opportunities?
DDc. How
much is the market paying per share for growth opportunities (i.e.,
for...

Karges Coffee Inc. manufactures a line of single-cup brewing
machines for home and office use that brew a cup of coffee, tea, or
hot chocolate in less than a minute. The machines use specially
packaged portions of coffee, tea, or hot chocolate that can be
purchased online directly from Karges or at specialty coffee shops
licensed to distribute the company's products. The appeal of the
brewing machines is twofold. First, they offer a high level of
convenience. The use of...

Analysts announced earnings per share of $4 for the
coming year for Toronto Skates Inc. The company plans not to pay
any dividends for the next three years. For the subsequent two
years, TS plans on retaining 50 percent of its earnings and 25
percent of its earnings from that point forward. Retained earnings
will be invested in projects with an expected return of 20 percent
per year. If the required rate of return is 12 percent, then the
price...

Alger Inc. manufactures six models of leaf blowers and weed
eaters. Alger's budgeting team is finalizing the sales budget for
the coming year. Sales in units and dollars for last year
follow:
Product
Number Sold
Price ($)
Revenue
LB-1
14,700
32
$ 470,400
LB-2
18,000
20
360,000
WE-6
25,200
15
378,000
WE-7
16,200
10
162,000
WE-8
6,900
18
124,200
WE-9
4,000
22
88,000
Total
$1,582,600
In looking over the previous year's sales figures, Alger's sales
budgeting team recalled the following:...

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