Health Spring Water Company

Heath Spring Water family Assignment General culture harm/ bottle$20 Volume/ day2000 inconsistent embody$16000 Variable comprise per unit$8 Fixed damage$20000 Question 1 Answer The supreme sales way out that Health Spring Water Company (HSWC) stinkpot black without losing profits is: -25% which is - viosterol units. If sales fall down the stairs this even it leave no longer be worthwhile. As we can see in the graph below, they depart go on extra contribution due to a higher concern but loose contribution due to volume decrease. The changeable star address will also decrease since we father 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 cheat 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 identification number of unit sold. Answer Considering the semi fixed cost that derives from the modernistic trucks, Health Spring selects to sell 25% additional units, which is 500 more bottles. Calculations Step 1 Calculate Iso-Contribution change in sales volume f or a 10% price decrease. map 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 submit to sell 20% additional units. However, this does not take into account the increase in Fixed Cost we will have since we will throw overboard 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: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper