week 8

Problems

		Problem Assignments: Week 8
			Assigned Problems				Points
1
1-A	What is the contribution margin of the product?					2 points	2
	Answer:	$4.50
1-B	Calculate the breakeven point in unit sales and dollars.
	Answer:		Breakeven in units is		11,112	3 points	2
	Answer:		Breakeven in dollars is		$83,340.00	3 points	2
	Why is the answer not 11,111.111 units?						2
1-C	What is the operating profit (loss) at 5,000 units per year?
	Answer:	-$27,500.00	Loss			3 points	2
1-D	What is the operating profit (loss) at 15,000 units per year?
	Answer:	$17,500.00				3 points	2
1-E
						10 points	10
2-A
	Answer	$3,620.69					2
2-B
	Answer	You calculate					4
2-C
	Answer	$3,000.00					2
2-D
	Answer	You calculate					5
3
	Answer	You calculate					5
4	Complete the assigned case						60
					Total points		100

The Sarah Cupcake Co. has fixed costs of $50,000 per year. It sells cupcakes in boxes of 6 for $7.50 each. Variable costs per unit are $3. This includes raw materials, packaging and costs of labor and electricity for the ovens.

Plot a breakeven chart (graph). Use the foregoing figures and other data as necessary. You should get straight lines.

Mrs. Moore owns 100 shares of stock in Daimler-Benz valued at €31.50 Euros per share. What is the value in $U.S. of her stock if the current exchange rate is $1.00 = €0.87?

What is the value of Mrs. Moore's stock in USD (dollars) if the exchange rate is €1.00 = $1.15 ?

What was the value of Mrs. Moore's stock in USD (dollars) when she purchased the stock for €27.95 in April 2003? At the time, €1.00 = $1.07330

The stock pays no dividend. If Mrs. Moore sells the stock, what will have been her return in percent? You have the information about the cost and proceeds of the sale above.

Lisa Murphy sees a painting for auction in Japan that is expected to sell for ¥3,000,000. How much money in dollars will that be at the exchange rate at the start of this week?

Next Week

	The Week 8 assignment completed our course section on global finance.
	In Week 9, we turn to the effectiveness of product cost determination and pricing.
	For perspective, lets review where we have been, where we are, and where we are going.
	From the Syllabus, here are Weeks 1-10
	Subject Area	Topic
	Week 1: Economic Analysis	The economic environment of business
	Week 2: Financial Accounting	Evaluating corporate performance
	Week 3: Financial Statement Analysis
	Week 4: Financial Valuation	Valuation of stocks and bonds
	Week 5: Analysis of Financial Situations	More advanced financial valuation methods
	Week 6: Ethics and Financial Reporting	How reliable are audited financial statements?
	Week 7: Introduction to International Finance	Global finance
	Week 8: Global Financial Investment
	Week 9: Cost Measurement Systems	The effectiveness of product cost determination and pricing
	Week 10: The Balanced Scorecard	Effective strategy implementation and performance evaluation