Product 1

Price/Unit 125.00
Unit Volume/ Year 8,400.00
Cost of Goods sold/Unit 62.00
Gross Sales 1,050,000.00
less: Commissions 31,500.00
Net Sales 1,018,500.00
less: Cost of Good Slod 520,800.00
Gross Profit 497,700.00
Total Gross Profit 1,113,630.00
less:
other Operating expenses 245,000.00
General & Administrative 387,000.00
Interest expenses 112,000.00
Income before taxes 369,630.00
less: Income taxes 170,029.80
Net Income 199,600.20
 Scenerio 1
Product 2 Product 1 Product 2
345.00 150.00 345.00
4,200.00 6,500.00 4,200.00
188.00 62.00 188.00
1,449,000.00 975,000.00 1,449,000.00
43,470.00 29,250.00 43,470.00
1,405,530.00 945,750.00 1,405,530.00
789,600.00 403,000.00 789,600.00
615,930.00 542,750.00 615,930.00
1,158,680.00

245,000.00
387,000.00
112,000.00
414,680.00
190,752.80
223,927.20
Scenerio 2 Scenerio 3
Product 1 Product 2 Product 1 Product 2
125.00 345.00 125.00 345.00
8,400.00 4,200.00 8,400.00 4,200.00
62.00 188.00 62.00 188.00
1,050,000.00 1,449,000.00 1,050,000.00 1,449,000.00
31,500.00 43,470.00 31,500.00 43,470.00
1,018,500.00 1,405,530.00 1,018,500.00 1,405,530.00
520,800.00 789,600.00 572,880.00 868,560.00
497,700.00 615,930.00 445,620.00 536,970.00
1,113,630.00 982,590.00

245,000.00 245,000.00
210,000.00 387,000.00
112,000.00 112,000.00
546,630.00 238,590.00
251,449.80 109,751.40
295,180.20 128,838.60
Scenerio 4
Product 1 Product 2
125.00 345.00
5,611.92 2,805.96
62.00 188.00
701,489.72 968,055.82
21,044.69 29,041.67
680,445.03 939,014.14
347,938.90 527,520.27
332,506.13 411,493.87
744,000.00

245,000.00
387,000.00
112,000.00
- 0.00
- 0.00
- 0.00
Planned Sales in Units 20000
Selling Price 15
Variable Cost per unit 9
Total Fixed Cost 60000

Part a Sales 300,000.00

less Variable cost 180,000.00
less fixed cost 60,000.00
Profit 60,000.00

Part b Scenerio 1 Scenerio 2

Decrease in Selling price of 10% An Increase in Variable Cost of 10%

Sales 270,000.00 Sales 300,000.00

less Variable cost 180,000.00 less Variable cost 198,000.00
less fixed cost 60,000.00 less fixed cost 60,000.00
Profit 30,000.00 Profit 30,000.00

Part c If the selling price declined by 10%, how many more units would have to be sold to achieve the planned profit?

Planned Sales in Units 26666.6666666667

Selling Price 13.5
Variable Cost per unit 9
Total Fixed Cost 60000
Sales 360,000.00
less Variable cost 240,000.00
less fixed cost 60,000.00
Profit 60,000.00
 Scenerio 3 Scenerio 4
An increase in total fixed cost of 10% A decline in unit sales of 10%

Sales 300,000.00 Sales 330,000.00

less Variable cost 180,000.00 less Variable cost 180,000.00
less fixed cost 66,000.00 less fixed cost 60,000.00
Profit 30,000.00 Profit 30,000.00

nned profit?
Selling Price 40.00
Variable cost 20.00
Fixed Cost 390,000.00
Discount 25%
Units purchased o 2.00
Discounte Rate Pu 30%
Normal Purchaser70%

Number of Custo 45882.352941177

Number of Units
Standard Price Discounted Price Total
Revenue 1,835,294.12 22,941.18 1,858,235.29
Variable Cost 1,468,235.29
Gross Profit 390,000.00
Fixed Cost 390,000.00
Net Profit -

Category A Category B
30% 70%
Customers 13764.70588 32117.64706
Number of Additional 27529.41176
Total Number of Units 73411.76471
Fixed Cost $ 5,000.00
Dishes per month 100.00
Variable Installation Cost $ 300.00
Additional Cost
Programming and satellite Rental $ 5.00
Fees
Billingper
andsubscriber
Customerper month
service $ 1.00
cost per subscriber
Installation Price per month $ 50.00
Subscription Price per month $ 20.00

Month 1 Month 2 Month 3 Month 4

Sales of dishes per month 100.00 100.00 100.00 100.00
Subscribed members 100.00 200.00 300.00 400.00
Installation Price Charge to customer $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
Subscrption fees charged to customer $ 2,000.00 $ 4,000.00 $ 6,000.00 $ 8,000.00
Revenue $ 7,000.00 $ 9,000.00 $ 11,000.00 $ 13,000.00
Variable installation cost $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00
Programming and satellite Rental $ 500.00 $ 1,000.00 $ 1,500.00 $ 2,000.00
Billing and Customer service $ 100.00 $ 200.00 $ 300.00 $ 400.00
cost
COGS per subscriber per month $ 30,600.00 $ 31,200.00 $ 31,800.00 $ 32,400.00
Gross Profit $ -23,600.00 $ -22,200.00 $ -20,800.00 $ -19,400.00
Fixed Cost $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
Net Profit $ -28,600.00 $ -27,200.00 $ -25,800.00 $ -24,400.00
 Year 1
Month 5 Month 6 Month 7 Month 8 Month 9 Month 10
100.00 100.00 100.00 100.00 100.00 100.00
500.00 600.00 700.00 800.00 900.00 1,000.00
$ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
$ 10,000.00 $ 12,000.00 $ 14,000.00 $ 16,000.00 $ 18,000.00 $ 20,000.00
$ 15,000.00 $ 17,000.00 $ 19,000.00 $ 21,000.00 $ 23,000.00 $ 25,000.00
$ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00
$ 2,500.00 $ 3,000.00 $ 3,500.00 $ 4,000.00 $ 4,500.00 $ 5,000.00
$ 500.00 $ 600.00 $ 700.00 $ 800.00 $ 900.00 $ 1,000.00
$ 33,000.00 $ 33,600.00 $ 34,200.00 $ 34,800.00 $ 35,400.00 $ 36,000.00
$ -18,000.00 $ -16,600.00 $ -15,200.00 $ -13,800.00 $ -12,400.00 $ -11,000.00
$ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
$ -23,000.00 $ -21,600.00 $ -20,200.00 $ -18,800.00 $ -17,400.00 $ -16,000.00
 Month 11 Month 12 Month 13 Month 14 Month 15 Month 16
100.00 100.00 100.00 100.00 100.00 100.00
1,100.00 1,200.00 1,300.00 1,400.00 1,500.00 1,600.00
$ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
$ 22,000.00 $ 24,000.00 $ 26,000.00 $ 28,000.00 $ 30,000.00 $ 32,000.00
$ 27,000.00 $ 29,000.00 $ 31,000.00 $ 33,000.00 $ 35,000.00 $ 37,000.00
$ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00
$ 5,500.00 $ 6,000.00 $ 6,500.00 $ 7,000.00 $ 7,500.00 $ 8,000.00
$ 1,100.00 $ 1,200.00 $ 1,300.00 $ 1,400.00 $ 1,500.00 $ 1,600.00
$ 36,600.00 $ 37,200.00 $ 37,800.00 $ 38,400.00 $ 39,000.00 $ 39,600.00
$ -9,600.00 $ -8,200.00 $ -6,800.00 $ -5,400.00 $ -4,000.00 $ -2,600.00
$ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
$ -14,600.00 $ -13,200.00 $ -11,800.00 $ -10,400.00 $ -9,000.00 $ -7,600.00
 Year 2
Month 17 Month 18 Month 19 Month 20 Month 21 Month 22
100.00 100.00 100.00 100.00 100.00 100.00
1,700.00 1,800.00 1,900.00 2,000.00 2,100.00 2,200.00
$ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
$ 34,000.00 $ 36,000.00 $ 38,000.00 $ 40,000.00 $ 42,000.00 $ 44,000.00
$ 39,000.00 $ 41,000.00 $ 43,000.00 $ 45,000.00 $ 47,000.00 $ 49,000.00
$ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00
$ 8,500.00 $ 9,000.00 $ 9,500.00 $ 10,000.00 $ 10,500.00 $ 11,000.00
$ 1,700.00 $ 1,800.00 $ 1,900.00 $ 2,000.00 $ 2,100.00 $ 2,200.00
$ 40,200.00 $ 40,800.00 $ 41,400.00 $ 42,000.00 $ 42,600.00 $ 43,200.00
$ -1,200.00 $ 200.00 $ 1,600.00 $ 3,000.00 $ 4,400.00 $ 5,800.00
$ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
$ -6,200.00 $ -4,800.00 $ -3,400.00 $ -2,000.00 $ -600.00 $ 800.00
 Month 23 Month 24 Month 25 Month 26 Month 27 Month 28
100.00 100.00 100.00 100.00 100.00 100.00
2,300.00 2,400.00 2,500.00 2,600.00 2,700.00 2,800.00
$ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
$ 46,000.00 $ 48,000.00 $ 50,000.00 $ 52,000.00 $ 54,000.00 $ 56,000.00
$ 51,000.00 $ 53,000.00 $ 55,000.00 $ 57,000.00 $ 59,000.00 $ 61,000.00
$ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00
$ 11,500.00 $ 12,000.00 $ 12,500.00 $ 13,000.00 $ 13,500.00 $ 14,000.00
$ 2,300.00 $ 2,400.00 $ 2,500.00 $ 2,600.00 $ 2,700.00 $ 2,800.00
$ 43,800.00 $ 44,400.00 $ 45,000.00 $ 45,600.00 $ 46,200.00 $ 46,800.00
$ 7,200.00 $ 8,600.00 $ 10,000.00 $ 11,400.00 $ 12,800.00 $ 14,200.00
$ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
$ 2,200.00 $ 3,600.00 $ 5,000.00 $ 6,400.00 $ 7,800.00 $ 9,200.00
 Year 3
Month 29 Month 30 Month 31 Month 32 Month 33 Month 34
100.00 100.00 100.00 100.00 100.00 100.00
2,900.00 3,000.00 3,100.00 3,200.00 3,300.00 3,400.00
$ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
$ 58,000.00 $ 60,000.00 $ 62,000.00 $ 64,000.00 $ 66,000.00 $ 68,000.00
$ 63,000.00 $ 65,000.00 $ 67,000.00 $ 69,000.00 $ 71,000.00 $ 73,000.00
$ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00
$ 14,500.00 $ 15,000.00 $ 15,500.00 $ 16,000.00 $ 16,500.00 $ 17,000.00
$ 2,900.00 $ 3,000.00 $ 3,100.00 $ 3,200.00 $ 3,300.00 $ 3,400.00
$ 47,400.00 $ 48,000.00 $ 48,600.00 $ 49,200.00 $ 49,800.00 $ 50,400.00
$ 15,600.00 $ 17,000.00 $ 18,400.00 $ 19,800.00 $ 21,200.00 $ 22,600.00
$ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
$ 10,600.00 $ 12,000.00 $ 13,400.00 $ 14,800.00 $ 16,200.00 $ 17,600.00
 Month 35 Month 36 Month 37 Month 38 Month 39 Month 40
100.00 100.00 100.00 100.00 100.00 100.00
3,500.00 3,600.00 3,700.00 3,800.00 3,900.00 4,000.00
$ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
$ 70,000.00 $ 72,000.00 $ 74,000.00 $ 76,000.00 $ 78,000.00 $ 80,000.00
$ 75,000.00 $ 77,000.00 $ 79,000.00 $ 81,000.00 $ 83,000.00 $ 85,000.00
$ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00
$ 17,500.00 $ 18,000.00 $ 18,500.00 $ 19,000.00 $ 19,500.00 $ 20,000.00
$ 3,500.00 $ 3,600.00 $ 3,700.00 $ 3,800.00 $ 3,900.00 $ 4,000.00
$ 51,000.00 $ 51,600.00 $ 52,200.00 $ 52,800.00 $ 53,400.00 $ 54,000.00
$ 24,000.00 $ 25,400.00 $ 26,800.00 $ 28,200.00 $ 29,600.00 $ 31,000.00
$ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
$ 19,000.00 $ 20,400.00 $ 21,800.00 $ 23,200.00 $ 24,600.00 $ 26,000.00
 Year 4
Month 41 Month 42 Month 43 Month 44 Month 45 Month 46
100.00 100.00 100.00 100.00 100.00 100.00
4,100.00 4,200.00 4,300.00 4,400.00 4,500.00 4,600.00
$ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
$ 82,000.00 $ 84,000.00 $ 86,000.00 $ 88,000.00 $ 90,000.00 $ 92,000.00
$ 87,000.00 $ 89,000.00 $ 91,000.00 $ 93,000.00 $ 95,000.00 $ 97,000.00
$ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00
$ 20,500.00 $ 21,000.00 $ 21,500.00 $ 22,000.00 $ 22,500.00 $ 23,000.00
$ 4,100.00 $ 4,200.00 $ 4,300.00 $ 4,400.00 $ 4,500.00 $ 4,600.00
$ 54,600.00 $ 55,200.00 $ 55,800.00 $ 56,400.00 $ 57,000.00 $ 57,600.00
$ 32,400.00 $ 33,800.00 $ 35,200.00 $ 36,600.00 $ 38,000.00 $ 39,400.00
$ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
$ 27,400.00 $ 28,800.00 $ 30,200.00 $ 31,600.00 $ 33,000.00 $ 34,400.00
 Month 47 Month 48 Month 49 Month 50 Month 51 Month 52
100.00 100.00 100.00 100.00 100.00 100.00
4,700.00 4,800.00 4,900.00 5,000.00 5,100.00 5,200.00
$ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
$ 94,000.00 $ 96,000.00 $ 98,000.00 $ 100,000.00 $ 102,000.00 $ 104,000.00
$ 99,000.00 $ 101,000.00 $ 103,000.00 $ 105,000.00 $ 107,000.00 $ 109,000.00
$ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00
$ 23,500.00 $ 24,000.00 $ 24,500.00 $ 25,000.00 $ 25,500.00 $ 26,000.00
$ 4,700.00 $ 4,800.00 $ 4,900.00 $ 5,000.00 $ 5,100.00 $ 5,200.00
$ 58,200.00 $ 58,800.00 $ 59,400.00 $ 60,000.00 $ 60,600.00 $ 61,200.00
$ 40,800.00 $ 42,200.00 $ 43,600.00 $ 45,000.00 $ 46,400.00 $ 47,800.00
$ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
$ 35,800.00 $ 37,200.00 $ 38,600.00 $ 40,000.00 $ 41,400.00 $ 42,800.00
 Year 5
Month 53 Month 54 Month 55 Month 56 Month 57 Month 58
100.00 100.00 100.00 100.00 100.00 100.00
5,300.00 5,400.00 5,500.00 5,600.00 5,700.0 5,800.00
$ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
$ 106,000.00 $ 108,000.00 $ 110,000.00 $ 112,000.00 $ 114,000.00 $ 116,000.00
$ 111,000.00 $ 113,000.00 $ 115,000.00 $ 117,000.00 $ 119,000.00 $ 121,000.00
$ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00 $ 30,000.00
$ 26,500.00 $ 27,000.00 $ 27,500.00 $ 28,000.00 $ 28,500.00 $ 29,000.00
$ 5,300.00 $ 5,400.00 $ 5,500.00 $ 5,600.00 $ 5,700.00 $ 5,800.00
$ 61,800.00 $ 62,400.00 $ 63,000.00 $ 63,600.00 $ 64,200.00 $ 64,800.00
$ 49,200.00 $ 50,600.00 $ 52,000.00 $ 53,400.00 $ 54,800.00 $ 56,200.00
$ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00 $ 5,000.00
$ 44,200.00 $ 45,600.00 $ 47,000.00 $ 48,400.00 $ 49,800.00 $ 51,200.00
 Month 59 Month 60
100.00 100.00
5,900.00 6,000.00
$ 5,000.00 $ 5,000.00
$ 118,000.00 $ 120,000.00
$ 123,000.00 $ 125,000.00
$ 30,000.00 $ 30,000.00
$ 29,500.00 $ 30,000.00
$ 5,900.00 $ 6,000.00
$ 65,400.00 $ 66,000.00
$ 57,600.00 $ 59,000.00
$ 5,000.00 $ 5,000.00
$ 52,600.00 $ 54,000.00
Product WADGET WEDGET WIDGET WODGET WUDGET
Price/Unit $ 125.00 $ 345.00 $ 99.00 $ 380.00 $ 235.00
Unit volume/ Year 8400 4200 10950 4000 3850
COGS/ Unit $ 62.00 $ 188.00 $ 52.00 $ 225.00 $ 109.00

Sales Commissions 0.03

Gross Sales $ 1,050,000.00 $ 1,449,000.00 $ 1,084,050.00 $ 1,520,000.00 $ 904,750.00

Less: Commissions $ 31,500.00 $ 43,470.00 $ 32,521.50 $ 45,600.00 $ 27,142.50
Net Sales $ 1,018,500.00 $ 1,405,530.00 $ 1,051,528.50 $ 1,474,400.00 $ 877,607.50
Less: COGS $ 520,800.0000 $ 789,600.0000 $ 569,400.0000 $ 900,000.0000 $ 419,650.0000
Gross Profit $ 497,700.0000 $ 615,930.0000 $ 482,128.5000 $ 574,400.0000 $ 457,957.5000