If the old forecast is 100 and the latest actual demand is 83, what is the exponentially smoothed forecast for the next period?

95.75

Explanation:

Old forecast = 100

Smoothing constant = 0.25

Latest actual demand = 83

New forecast will be:

= smoothing constant × latest demand + (1 - smoothing constant) × old forecast

= (0.25 × 83) + [(1 - 0.25) × 100)]

= 20.75 + 75

= 95.75

a. $125,000

b. $140,000

Explanation:

The computation is shown below:

Break-even point in sales  = (Fixed expenses ) ÷ (Contribution margin ratio)

where,

Contribution margin ratio = Contribution margin per unit ÷ selling price per unit

where,

Contribution margin per unit = Revenue generated by each unit - variable cost per unit

a. For proposal A,

Contribution margin per unit would be

= $20 - $12

= $8

And, Contribution margin ratio equal to

= $8 ÷ $20

= 40%

Now the break-even point in dollars would be

= $50,000 ÷ 40%

= $125,000

b. For proposal B,

Contribution margin per unit would be

= $20 - $10

= $10

And, Contribution margin ratio equal to

= $10 ÷ $20

= 50%

Now the break-even point in dollars would be

= $70,000 ÷ 50%

= $140,000