Carram Co produces one product. It currently sells 12,000 units per year at a price of $75 per unit. Carram Co has recently undertaken some market research which showed that for every increase inprice of $5, annual sales demand would decrease by 1,000 units.What is the marginal revenue at an output level of 10,000 units (to the nearest $)?$

Sales Revenue :— It is the amount of sales generated during the period. It is calculated by…

Answered: Carram Co produces one product. It…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 7EB: Delta Co. sells a product for $150 per unit. The variable cost per unit is $90 and fixed costs are...

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Delta Co. sells a product for $150 per unit. The variable cost per unit is $90 and fixed costs are $15,250. Delta Co.s tax rate is 36% and the company wants to earn $44,000 after taxes. What would be Deltas desired pre-tax income? What would be break-even point in units to reach the income goal of $44,000 after taxes? What would be break-even point in sales dollars to reach the income goal of $44000 after taxes? Create a contribution margin income statement to show that the break-even point calculated in B, generates the desired after-tax income.
Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22 each in the coming year. Total variable costs equal 1,086,800. Total fixed costs equal 8,000,000. (Round all ratios to four significant digits, and round all dollar amounts to the nearest dollar.) Required: 1. What is the contribution margin per unit? What is the contribution margin ratio? 2. Calculate the sales revenue needed to break even. 3. Calculate the sales revenue needed to achieve a target profit of 245,000. 4. What if the average price per unit increased to 23.50? Recalculate: a. Contribution margin per unit b. Contribution margin ratio (rounded to four decimal places) c. Sales revenue needed to break even d. Sales revenue needed to achieve a target profit of 245,000
Jasmine Inc. makes a single product that it sells for $25 each. Variable costs are $13 per unit and annual fixed costs total $30,000 per year. The company would like to realize operating income next year of $60,000. What level of sales in dollars must the company achieve to reach its target profit?
Weber Inc., sells its one product for $40 per unit. The variable cost per unit is $24. The fixed cost per year is $16,000a. What is the break-even point in units?b. What is the break-even point in dollars?c. If Weber would like to have $1,000 profit, how many units should be sold?d. If the selling price changes to $34 per unit, what is the new break-even point in units?
APQ Company currently sells a piece of equipment for $150 per unit. It plans on lowering the price of the unit to $119 per unit. The cost of goods for each unit is consistent each year, at $52 per unit. The company expects to sell 100,000 units in the current year. Suppose that if APQ drops the price on the equipment immediately, it can increase sales over the next year by 30% to 130,000 units. Will this price decrease have a positive or negative impact on the company's EBIT? What will be the dollar value of the incremental impact of this price drop on the firm's EBIT? Will this have a positive or negative impact on the EBIT for the company? What will the dollar value of the incremental impact of the price drop be for the company? (Enter a negative for a loss, positive for a gain; round your answer to the nearest whole dollar.)
The Chimes Clock Company sells a particular clock for $40. The variable costs are $23 per clock and the breakeven point is 230 clocks. The company expects to sell 280 clocks this year. If the company actually sells 430 clocks, what effect would the sale of additional 150 clocks have on operating income? Explain your answer. The sale of an additional 150 clocks would operating income by the amount of The total effect would amount to
Feather Friends, Inc., distributes a high-quality wooden birdhouse that sells for $20 per unit. Variable expenses are $8 per unit, and fixed expenses total $180,000 per year. Answer the following independent questions: What is the product's CM ratio? Use the CM ratio to determine the break-even point in dollar sales. Due to an increase in demand, the company estimates that sales will increase by $75,000 during the next year. By how much should net operating income increase (or net loss decrease) assuming that fixed expenses do not change? Refer to the original data. Assume that the company sold 18,000 units last year. The sales manager is convinced that a 10% reduction in the selling price, combined with a $30,000 increase in advertising, would increase annual unit sales by one-third. Prepare two contribution format income statements, one showing the results of last year's operations and one showing the results of operations if these changes are made. Would you recommend that the…
Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $60 per unit and has a CM ratio of 40%. The company’s fixed expenses are $540,000 per year. The company plans to sell 26,000 knapsacks this year. Required: What are the variable expenses per unit? Use the equation method for the following: What is the break-even point in units and in sales dollars? What sales level in units and in sales dollars is required to earn an annual profit of $108,000? What sales level in units is required to earn an annual after-tax profit of $108,000 if the tax rate is 20%? Assume that through negotiation with the manufacturer, Super Sales Company is able to reduce its variable expenses by $3 per unit. What is the company’s new break-even point in units and in sales dollars? (Do not round intermediate calculations. Round your final answers to the nearest whole number.)
Baker Company has a product that sells for $20 per unit. The variable expenses are $12 per unit, and fixed expenses total $30,000 per year. Compute for the following:c. If total sales increase by $20,000 and fixed expenses remain unchanged, by how much would net operating income be expected to increase?d. The marketing manager wants to increase advertising by $6,000 per year. How many additional units would have to be sold to increase overall net operating income by $2,000?
Q. Samara Company is the exclusive distributor for a revolutionary bookbag. The product sells for $60 per unit and has a CM ratio of 40%. The company’s fixed expenses are $360,000 per year. The company plans to sell 17,000 bookbags this year. Required:Using the equation method:a. What is the break-even point in units and in sales dollars?b. What sales level in units and in sales dollars is required to earn an annual profit of $90,000?
Last year Minden Company introduced a new product and sold 15,000 units at a price of $74 per unit. The product's variable expenses are S44 per unit and its fixed expenses are $521,400 per year. Required: What was this product's net operating income (loss) last year? What is the product's break-even point in unit sales and dollar sales? Assume the company conducted a marketing study that estimates it can increase annual sales of this product by 5,000 units for each $2 reduction in its selling price. If the company will only consider price reductions in increments of $2 (e.g., S72, S70, etc.), what is the maximum annual profit it can earn on this product? What sales volume and selling price per unit generate the maximum profit? What would be the break-even point in unit sales and dollar sales using the selling price you calculated in requirement 37
Assume that a merchandiser purchases a product from a supplier for $3.00 per unit and then sells it to customers for $5.00 per unit. Ordinarily, the company sell 30,000 units per year; however, it is considering lowering its price to $4.50 per unit. At the lower price, the company expects to sell 49,250 units per year. What total contribution margin will the company earn if it sells 49,250 units at a price of $4.50 per unit? Multiple Choice $69,400 $73,875 $64,025 $83,725

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