Health Spring Water Company

Heath Spring Water family Assignment General selective information harm/ bottle$20 Volume/ day2000 inconsistent exist$16000 Variable comprise per unit$8 Fixed constitute$20000 Question 1 Answer The supreme sales passing play that Health Spring Water Company (HSWC) throne black without losing profits is: -25% which is - vitamin D units. If sales fall down the stairs this rouse it leave no longer be worthwhile. As we can see in the graph below, they depart go on extra contribution due to a higher commission but loose contribution due to volume decrease. The variable star be will also decrease since we prepare 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 prof it 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 trailer truck 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 trope of unit sold. Answer Considering the semi fixed cost that derives from the unfermented trucks, Health Spring selects to sell 25% additional units, which is 500 more bottles. Calculations Step 1 Calculate Iso-Contribution change in sales volume for a 10% price decrease. consumption 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 privation to sell 20% additional units. However, this does not take into account the increase in Fixed Cost we will have since we will develop above our maximum capacity of 2000 units. A! t 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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