- A Company S Fixed Operating Costs Are 640 000 Its Variable Costs Are 3 05 Per Unit And The Product S Sales Price Is 1 (8.03 KiB) Viewed 10 times
The Warren Watch Company sells watches for $29, fixed costs are $175,000, and variable costs are $13 per watch. a. What is the firm's gain or loss at sales of 7,000 watches? Loss, if any, should be indicated by a minus sign. Round your answer to the nearest cent. What is the firm's gain or loss at sales of 15,000 watches? Loss, if any, should be indicated by a minus sign. Round your answer to the nearest cent. $ b. What is the break-even point (unit sales)? Round your answer to the nearest whole number. units
Parramore Corp has $20 million of sales, $3 million of inventories, $3.25 million of receivables, and $1 million of payables. Its cost of goods sold is 85% of sales, and it finances working capital with bank loans at a 6% rate. Assume 365 days in year for your calculations. 1. What is Parramore's cash conversion cycle (CCC)? Do not round intermediate calculations. Round your answer to two decimal places. days Parramore could lower its inventories and receivables by 9% each and increase its payables by 9%, all without affecting sales or cost of goods sold, what would be the new CCC? Do not round intermediate calculations. Round your answer to two decimal places. days 3. How much cash would be freed up, if Parramore could lower its inventories and receivables by 9% each and increase its payables by 9%, all without affecting sales or cost of goods sold? Write out your answer completely. For Example, 13.2 million should be entered as 13,200,000. Do not round intermediate calculations. Round your answer to the nearest dollar. $ 4. By how much would pretax profits change, if Parramore could lower its inventories and receivables by 9% each and increase its payables by 9%, all without affecting sales or cost of goods sold? Write out your answer completely. For Example, 13.2 million should be entered as 13,200,000. Do not round intermediate calculations. Round your answer to the nearest dollar. $
Zane Corporation has an inventory conversion period of 41 days, an average collection period of 27 days, and a payables deferral period of 31 days. Assume 365 days in year for your calculations. a. What is the length of the cash conversion cycle? Round your answer to two decimal places. days b. If Zane's annual sales are $4,555,445 and all sales are on credit, what is the investment in accounts receivable? Do not round intermediate calculations. Round your answer to the nearest cent. $ c. How many times per year does Zane turn over its inventory? Assume that the cost of goods sold is 75% of sales. Use sales in the numerator to calculate the turnover ratio. Do not round intermediate calculations. Round your answer to two decimal places. X
Pasha Corporation produces motorcycle batteries. Pasha turns out 2,000 batteries a day at a cost of $8 per battery for materials and labor. It takes the firm 25 days to convert raw materials into a battery. Pasha allows its customers 40 days in which to pay for the batteries, and the firm generally pays its suppliers in 30 days. Assume 365 days in year for your calculations. a. What is the length of Pasha's cash conversion cycle? Round your answer to two decimal places. days b. At a steady state in which Pasha produces 2,000 batteries a day, what amount of working capital must it finance? Round your answer to the nearest dollar. $ c. By what amount could Pasha reduce its working capital financing needs if it was able to stretch its payables deferral period to 35 days? Round your answer to the nearest dollar. $ d. Pasha's management is trying to analyze the effect of a proposed new production process on its working capital investment. The new production process would allow Pasha to decrease its inventory conversion period to 15 days and to increase its daily production to 2,500 batteries. However, the new process would cause the cost of materials and labor to increase to $9. Assuming the change does not affect the average collection period (40 days) or the payables deferral period (30 days), what will be the length of its cash conversion cycle and its working capital financing requirement if the new production process is implemented? Round your answer for cash conversion cycle to two decimal places and for working capital financing to the nearest cent. Cash conversion cycle Working capital financing $ days