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Toy Box Inc.




Toy Box Inc. is contemplating expanding their sales of their children?s toys. The have an opportunity to stock and sell the X toy that has been a big hit with children everywhere. They need to order the X toys from the manufacturer in a minimum order of 100 at a cost of $12 each. They could resell the X toy in their store for $22 each.;Due to anticipated demand, Toy Box Inc. will need to hire an additional part-time cashier at $600 a month which will be classified as a fixed-cost attributable to the X toy. Also, they have offered a $1 sales commission per toy to their floor sales representative. They will also include a package of trading cards with every purchase of an X toy, which will cost them an additional $2 each.;Required;To make the project worthwhile, Toy Box Inc. would require a $5,000 profit per month. What level of sales in units and in dollars would be required to reach this target profit? Show all computations.;Assume that the venture is undertaken and an order is placed for 100 X toys. What would be Toy Box?s break-even point in units and in sales dollars? Show computations and explain the reasoning behind your answer. You can ignore the fixed cost of $600 for this part.


Paper#80950 | Written in 18-Jul-2015

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