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Author Question: Veron Corporation is considering building a new plant in Europe. They predict sales at the new plant ... (Read 74 times)

deesands

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Veron Corporation is considering building a new plant in Europe.  They predict sales at the new plant to be 100,000 units at $4.00/unit.  Below is a listing of estimated expenses:

CategoryTotal Annual Expenses% of Annual Expense
that are Fixed
Materials$20,00010%
Labour$30,00020%
Overhead$50,00040%
Marketing/Admin$10,00060%

A European firm was contracted to sell the product and will receive a commission of 13% of the sales price.  No U.S. home office expenses will be allocated to the new facility.


How much does the European contractor expect to make in commissions?
◦ $52,000
◦ $80,000
◦ $13,000
◦ $40,000


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Marked as best answer by deesands on Jan 5, 2020

cici

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D2AR0N

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  • Posts: 434
Veron Corporation is considering building a new plant in Europe.  They predict sales at the new plant to be 100,000 units at $4.00/unit.  Below is a listing of estimated expenses:

CategoryTotal Annual Expenses% of Annual Expense
that are Fixed
Materials$20,00010%
Labour$30,00020%
Overhead$50,00040%
Marketing/Admin$10,00060%

A European firm was contracted to sell the product and will receive a commission of 13% of the sales price.  No U.S. home office expenses will be allocated to the new facility.


The variable cost per unit for Veron Corporation is
◦ $0.76.
◦ $1.28.
◦ $1.62.
◦ $0.86.




Lisaclaire

  • Sr. Member
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  • Posts: 435
Veron Corporation is considering building a new plant in Europe.  They predict sales at the new plant to be 100,000 units at $4.00/unit.  Below is a listing of estimated expenses:

CategoryTotal Annual Expenses% of Annual Expense
that are Fixed
Materials$20,00010%
Labour$30,00020%
Overhead$50,00040%
Marketing/Admin$10,00060%

A European firm was contracted to sell the product and will receive a commission of 13% of the sales price.  No U.S. home office expenses will be allocated to the new facility.


The contribution margin ratio for Veron Corporation is
◦ 32.00%.
◦ 68.00%.
◦ 81.00%.
◦ 132.00%.




c0205847

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  • Posts: 417
Veron Corporation is considering building a new plant in Europe.  They predict sales at the new plant to be 100,000 units at $4.00/unit.  Below is a listing of estimated expenses:

CategoryTotal Annual Expenses% of Annual Expense
that are Fixed
Materials$20,00010%
Labour$30,00020%
Overhead$50,00040%
Marketing/Admin$10,00060%

A European firm was contracted to sell the product and will receive a commission of 13% of the sales price.  No U.S. home office expenses will be allocated to the new facility.


The margin of safety percentage for Veron Corporation is
◦ 87.50%.
◦ 12.50%.
◦ 93.56%.
◦ 112.50%.




 

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