Health Spring Water Company

Heath Spring Water family Assignment General data harm/ bottle$20 Volume/ day2000 inconsistent hail$16000 Variable comprise per unit$8 Fixed monetary value$20000 Question 1 Answer The supreme sales expiration that Health Spring Water Company (HSWC) buns double-dyed(a) without losing profits is: -25% which is - five hundred units. If sales fall down the stairs this head teacher it leave no longer be worthwhile. As we can see in the graph below, they depart go on extra contribution due to a higher weigh down but loose contribution due to volume decrease. The versatile star constitute will also decrease since we green groceries less units. Calculations To calculate the Iso-Contribution kind in wrong and levels I will use the following formula and calculations. ?Q/Q=?P/((P-v)+?P) ?P/P=20%??P=20%*20=$4 ?Q/Q=(-(+4))/((20-8)+(4) )=(-4)/16=-25% ?Q/Q=-25%??Q=-25%*2000=-500 shifts Table Change in salesUnit variationChange in ContributionChange in FCChange in profit 0%08.00008.000 -5%-1006.40006.400 -10%-2004.80004.800 -15%-3003.20003.200 -20%-4001.60001.600 -25%-500000 Graph ? Question 2 In this question we will add a rig fixed cost in terms of trucks. This cost is neither variable nor fixed. Hence, we will blazon out it Semi fixed.

This cost is a bit special, because it evolves stage in function of the good turn of unit sold. Answer Considering the semi fixed cost that derives from the sore trucks, Health Spring selects to sell 25% additional units, which is 500 more bottles. Calculations Step 1 Calculate Iso-Contribution change in sales volume for a 10% price decrease. enforce this formula: ?Q/Q=(-?P)/( (P-v)+?P) ?P/P=-10%??P=-10%*20=-2 ?Q/Q=(! -(-2))/((20-8)+(-2) )=(+2)/10=0,2=20% ?Q/Q=+20%??Q=+20%*2000=+400 With a 10 percent price decrease we deal to sell 20% additional units. However, this does not take into account the increase in Fixed Cost we will have since we will stop over above our maximum capacity of 2000 units. At the moment we need to sell an additional of 400 units....If you want to get a full essay, order it on our website: OrderEssay.net

If you want to get a full information about our service, visit our page: How it works.