eBookTarget ProfitShow Me HowSS=falseTrailblazer Company sells a product for $240 per unit. The variable cost is $110 per unit, and fixed costs are $390,000.Determine (a) the break-even point in sales units and (b) the sales units required for the company to achieve a target profit of $81,900.a. Break-even point in sales unitsb. Break-even point in sales units required for the company to achieve a target profit of $81,900Check My Work 2 more Check My Work uses remaining.unitsunitsPrevious= 1Next

BREAKEVEN POINT Break Even means the volume of production or sales where there is no profit or…

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Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 4BE

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Sales Needed to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in the coming year. Variable cost is 35% of the sales price; contribution margin is 65% of the sales price. Total fixed cost equals 78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required: 1. Calculate the sales revenue that Chillmax must make to earn operating income of 81,900 by using the point in sales equation. 2. Check your answer by preparing a contribution margin income statement based on the sales dollars calculated in Requirement 1.
Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
Contribution Margin Ratio, Break-Even Sales, Operating Leverage Elgart Company produces plastic mailboxes. The projected income statement for the coming year follows: Required: 1. Compute the contribution margin ratio for the mailboxes. 2. How much revenue must Elgart earn in order to break even? 3. What is the effect on the contribution margin ratio if the unit selling price and unit variable cost each increase by 15%? 4. CONCEPTUAL CONNECTION Suppose that management has decided to give a 4% commission on all sales. The projected income statement does not reflect this commission. Recompute the contribution margin ratio, assuming that the commission will be paid. What effect does this have on the break-even point? 5. CONCEPTUAL CONNECTION If the commission is paid as described in Requirement 4, management expects sales revenues to increase by 80,000. How will this affect operating leverage? Is it a sound decision to implement the commission? Support your answer with appropriate computations.
Klamath Company produces a single product. The projected income statement for the coming year is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. 2. Suppose 10,000 units are sold above break-even. What is the operating income? 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. (Note: Round the contribution margin ratio to four decimal places, and round the sales revenue to the nearest dollar.) Suppose that revenues are 200,000 more than expected for the coming year. What would the total operating income be?
When prices are rising (inflation), which costing method would produce the highest value for gross margin? Choose between first-in, first-out (FIFO); last-in, first-out (LIFO); and weighted average (AVG). Evansville Company had the following transactions for the month. Calculate the gross margin for each of the following cost allocation methods, assuming A62 sold just one unit of these goods for $10,000. Provide your calculations. A. first-in, first-out (FIFO) B. last-in, first-out (LIFO) C. weighted average (AVG)
Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is 6. Total fixed cost is 10,000. Required: 1. Prepare a CVP graph with Units Sold as the horizontal axis and Dollars as the vertical axis. Label the break-even point on the horizontal axis. 2. Prepare CVP graphs for each of the following independent scenarios: (a) Fixed cost increases by 5,000, (b) Unit variable cost increases to 7, (c) Unit selling price increases to 12, and (d) Fixed cost increases by 5,000 and unit variable cost is 7.
1. Break-Even Point Hilton Enterprises sells a product for $118 per unit. The variable cost is $80 per unit, while fixed costs are $434,644. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $123 per unit. 2. Target Profit Trailblazer Company sells a product for $170 per unit. The variable cost is $60 per unit, and fixed costs are $572,000. Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of $200,200.
ne Breakeven point-Algebraic and graphical Fine Leather Enterprises sells its single product for $128.12 per unit. The firm's fixed operating costs are $472,300 annually, and its variable operating costs are $85.55 per unit. a. Find the firm's operating breakeven point in units. b. Label the x axis "Sales (units)" and the y axis "Costs/Revenues ($)," and then graph the firm's sales revenue, total operating cost, and fixed operating cost functions on these axes. In addition, label the operating breakeven point and the areas of loss and profit (EBIT). ts a. The operating breakeven point is units. (Round to the nearest integer.) Text dia Librai Calculat Resource Enter your answer in the answer box and then click Check Answer. Study 1 part remaining Clear All Check Answer unication Tools > Ouestion 10 (0/1) Question 11 (0/1) Ouestion 12 (0/1) Question 9 (0/1) Type here to search
CVP analysis—what-if questions; breakeven Monterey Co. makes and sells a single product. The current selling price is $15 per unit. Variable expenses are $9 per unit, and fixed expenses total $27,000 per month. Required:(Unless otherwise stated, consider each requirement separately.)a. Calculate the break-even point expressed in terms of total sales dollars and sales volume.b. Calculate the margin of safety and the margin of safety ratio. Assume current sales are $75,000.c. Calculate the monthly operating income (or loss) at a sales volume of 5,400 units per month.d. Calculate monthly operating income (or loss) if a $2 per unit reduction in selling price results in a volume increase to 8,400 units per month.e. What questions would have to be answered about the cost–volume–profit analysis simplifying assumptions before adopting the price cut strategy of part d ?f. Calculate the monthly operating income (or loss) that would result from a$1 per unit price increase and a $6,000 per month…
v.com/ilm/takeAssignment/takeAssignmentMain.do?invoker=&takeAsslghmehtSesslohLocator=&lnprogress=lalse Update Target Profit Trailblazer Company sells a product for $155 per unit. The variable cost is $80 per unit, and fixed costs are $585,000. Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of $157,950. a. Break-even point in sales units units b. Break-even point in sales units if the company desires a target profit of $157,950 units
Target Profit Trailblazer Company sells a product for $110 per unit. The variable cost is $45 per unit, and fixed costs are $331,500. Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of $102,765. a. Break-even point in sales units units b. Break-even point in sales units if the company desires a target profit of $102,765 units
Target Profit Trailblazer Company sells a product for $195 per unit. The variable cost is $90 per unit, and fixed costs are $724,500. Determine (a) the break-even point in sales units and (b) the sales units required for the company to achieve a target profit of $202,860. a. Break-even point in sales units b. Break-even point in sales units required for the company to achieve a target profit of $202,860 All work saved. units units Previous K Next

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