potential market as more individuals and small business are moving their file backups to secure online servers that can be accessed around the clock. Here is a summary of data projections for this business: Selling price per year per customer $95 account: Direct Supplies $23 Direct Labor 8 Overhead 6 Selling expense 5 Variable costs per unit $42 Overhead $195,000 Advertising 55,000 Administrative expense 68,000 Total annual fixed costs $318,000 Required: Compute the annual breakeven point in customer accounts. Suppose managers projects sales to 6,500 customer accounts next year. If that projection is accurate, how much profit will the company realize? To improve profitability, management is considering the following four alternative courses of action. (in performing the required steps, use the figures from items 1 and 2, and treat each alternative independently.) Calculate the number of digital lockbox accounts that must be sold to generate a targeted profit of $95,400. Assume that costs and selling price remain constant. Calculate the operating income if the company increases the number of accounts sold by 20 percents and cuts the selling price by $5 per account. Determine the number of accounts that must be sold to break even if advertising costs (fixed costs) increase by $47,700. Find the number of accounts that must be sold to generate a targeted profit of $120,000 if variable costs decrease by 10 percent. Question Three:
potential market as more individuals and small business are moving their file backups to secure online servers that can be accessed around the clock. Here is a summary of data projections for this business: Selling price per year per customer account: $95 Direct Supplies $23 Direct Labor 8 Overhead 6 Selling expense 5 Variable costs per unit $42 Overhead $195,000 Advertising 55,000 Administrative expense 68,000 Total annual fixed costs $318,000 Required: Compute the annual breakeven point in customer accounts. Suppose managers projects sales to 6,500 customer accounts next year. If that projection is accurate, how much profit will the company realize? To improve profitability, management is considering the following four alternative courses of action. (in performing the required steps, use the figures from items 1 and 2, and treat each alternative independently.) Calculate the number of digital lockbox accounts that must be sold to generate a targeted profit of $95,400. Assume that costs and selling price remain constant. Calculate the operating income if the company increases the number of accounts sold by 20 percents and cuts the selling price by $5 per account. Determine the number of accounts that must be sold to break even if advertising costs (fixed costs) increase by $47,700. Find the number of accounts that must be sold to generate a targeted profit of $120,000 if variable costs decrease by 10 percent. Question Three:
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