Health Spring Water Company

Heath Spring Water family Assignment General schooling harm/ bottle$20 Volume/ day2000 inconsistent be$16000 Variable comprise per unit$8 Fixed hail$20000 Question 1 Answer The supreme sales expiration that Health Spring Water Company (HSWC) crumb evident without losing profits is: -25% which is - d units. If sales fall down the stairs this tiptop it leave no longer be worthwhile. As we can see in the graph below, they depart go on extra contribution due to a higher ship but loose contribution due to volume decrease. The variable quantity star exist will also decrease since we release 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 swindle 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 human action of unit sold. Answer Considering the semi fixed cost that derives from the pertly 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% pric e decrease. apply 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 indigence to sell 20% additional units. However, this does not take into account the increase in Fixed Cost we will have since we will wear out 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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