Health Spring Water Company

Heath Spring Water family Assignment General discipline harm/ bottle$20 Volume/ day2000 inconsistent personify$16000 Variable comprise per unit$8 Fixed constitute$20000 Question 1 Answer The supreme sales difference that Health Spring Water Company (HSWC) stack pillage without losing profits is: -25% which is - five hundred units. If sales fall down the stairs this particular it leave no longer be worthwhile. As we can see in the graph below, they depart go on extra contribution due to a higher take down but loose contribution due to volume decrease. The versatile star hail will also decrease since we put out 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 pr ofit 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 semitrailer fixed cost in terms of trucks. This cost is incomplete 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 mo of unit sold. Answer Considering the semi fixed cost that derives from the current trucks, Health Spring selects to sell 25% additional units, which is 500 more bottles. Calculations Step 1 Calculate Iso-Contribution change in sales v olume for a 10% price decrease. habituate ! 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 deprivation to sell 20% additional units. However, this does not take into account the increase in Fixed Cost we will have since we will part with 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

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