Gyrdir ehf. manufactures and sells one type of leather belts for 2,500 kr. piece. Production for...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Gyrdir ehf. manufactures and sells one type of leather belts for2,500 kr. piece. Production for each belt, all variable, amounts to1,000 kr. Gyrdir is planning to rent a booth on the forthcomingfashion show in the Exhibition Hall. Gyrdir ehf. can choose betweenthe following rental terms for the sales booth:
1. to pay only a fixed rent before the show, kr. 501,000.
2. to pay a fixed amount of kr. 400,000 and an additional 10% ofsales revenue.
3. to pay 20% of the sales revenue but no fixed amount.
Requested:
a) What does Gyrdir ehf. have to sell many multiple belts toreach a break-even point, based on
which of these three options?
b) What choice should Gyrdir ehf. choose if he expects to sell800 belts at the show? Show
calculations to justify the choice.
Gyrdir ehf. manufactures and sells one type of leather belts for2,500 kr. piece. Production for each belt, all variable, amounts to1,000 kr. Gyrdir is planning to rent a booth on the forthcomingfashion show in the Exhibition Hall. Gyrdir ehf. can choose betweenthe following rental terms for the sales booth:
1. to pay only a fixed rent before the show, kr. 501,000.
2. to pay a fixed amount of kr. 400,000 and an additional 10% ofsales revenue.
3. to pay 20% of the sales revenue but no fixed amount.
Requested:
a) What does Gyrdir ehf. have to sell many multiple belts toreach a break-even point, based on
which of these three options?
b) What choice should Gyrdir ehf. choose if he expects to sell800 belts at the show? Show
calculations to justify the choice.
Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.