he Unique Toys Company manufactures and sells toys. Currently, 300,000 units are sold per year at $12.50 per unit. Fixed costs are $880,000 per year. Variable costs are $7.00 per unit. Consider each case separately: Required: 1 a. What is the current annual operating income? b. What is the present breakeven point in revenues? Compute the new operating income for each of the following changes: A 10% increase in variable costs A $250,000 increase in fixed costs and a 2% increase in units sold A 10% decrease in fixed costs, a 10% decrease in selling price, a 10% increase in variable cost per unit, and a 25% increase in units sold Compute the new breakeven point in units for each of the following changes: A 20% increase in fixed costs A 12% increase in selling price and a $30,000 increase in fixed costs
he Unique Toys Company manufactures and sells toys. Currently, 300,000 units are sold per year at $12.50 per unit. Fixed costs are $880,000 per year. Variable costs are $7.00 per unit. Consider each case separately: Required: 1 a. What is the current annual operating income? b. What is the present breakeven point in revenues? Compute the new operating income for each of the following changes: A 10% increase in variable costs A $250,000 increase in fixed costs and a 2% increase in units sold A 10% decrease in fixed costs, a 10% decrease in selling price, a 10% increase in variable cost per unit, and a 25% increase in units sold Compute the new breakeven point in units for each of the following changes: A 20% increase in fixed costs A 12% increase in selling price and a $30,000 increase in fixed costs
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 36P: Faldo Company produces a single product. The projected income statement for the coming year, based...
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The Unique Toys Company manufactures and sells toys. Currently, 300,000 units are sold per year at $12.50 per unit. Fixed costs are $880,000 per year. Variable costs are $7.00 per unit. Consider each case separately:
Required:
1 a. What is the current annual operating income?
b. What is the present breakeven point in revenues?
Compute the new operating income for each of the following changes:
- A 10% increase in variable costs
- A $250,000 increase in fixed costs and a 2% increase in units sold
- A 10% decrease in fixed costs, a 10% decrease in selling price, a 10% increase in variable cost per unit, and a 25% increase in units sold
Compute the new breakeven point in units for each of the following changes:
- A 20% increase in fixed costs
- A 12% increase in selling price and a $30,000 increase in fixed costs
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