Stan Todd,Inc

question 17

Essay

Stan Todd,Inc.wants to manufacture a new cell phone that can be worn on the wrist.Information from doing market research shows that he can sell this phone for $25 each.His fixed costs would be $145,000 a year and variable costs would amount to $10 per phone.
(1)What would the contribution margin ratio be?
(2)What sales volume in units would Stan need to break-even?
(3)What sales volume in units would Stan need to earn $200,000 profit?
(4)What would be the margin of safety if he sold 25,000 units (use the information calculated in #2)?

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Definitions:

Interview Method

is a qualitative research technique that involves direct questioning of participants to obtain data about their beliefs, attitudes, experiences, or behavior.

Objective Research

A method of inquiry that seeks to collect and analyze data without bias, focusing on observable phenomena and facts.

Partial Picture

An incomplete or fragmented view of something, lacking full understanding or comprehensive details.

Negative Correlation

A relationship between two variables in which one variable increases as the other decreases, indicating an inverse relationship.