FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- Midnight Co. has a contribution margin of $240,000, which is 40% of total sales. Fixed costs are $190,000. What are total variable costs if nothing else changes but Midnight is able to decrease its fixed costs to $160,000? O $240,000 O $270,000 $360,000 O $330,000 O None of the abovearrow_forwardForest Company sells a product for $100 per unit. The variable cost is $50 per unit, and fixed costs are $200,000. Determine (a) the break-even point in sales units and (b) the sales units required for the company to achieve a target profit of $66,000.a. Break-even point in sales units fill in the blank 1 of 2 unitsb. Break-even point in sales units required for the company to achieve a target profit of $66,000 fill in the blank 2 of 2 unitsarrow_forwardSarafine, Inc. sells a single product for $25. Variable costs are $12 per unit and fixed costs total $130,000 at a volume level of 5,000 units. Assuming that fixed costs do not change, Sarafine's break-even sales would be: Mutiple Choice $210.000. $250.000. $350.000 $530.000 None of the answers is comectarrow_forward
- A product sells for $30 per unit and has variable costs of $18.00 per unit. The fixed costs are $960,000. If the variable costs per unit were to decrease to $16.50 per unit, fixed costs increase to $1,080,000, and the selling price does not change, break-even point in units would: Multiple Choice O O Equal 6,000. Increase by 24,828. Not change. Increase by 4,000. Decrease by 24,828.arrow_forwardWok of Fame, Inc., makes and sells woks at a price of $5.00 per unit. Variable cost is $3.00 per unit. The company's total fixed costs are $52,500. How much must total sales be if Wok of Fame wants to earn an operating income of $17,500? $100,000 $70,000 $175,000 $17,500 $26,250arrow_forwardEaton Tool Company has fixed costs of $435,600, sells its units for $94, and has variable costs of $50 per unit. a. Compute the break-even point. Break-even point b. Ms. Eaton comes up with a new plan to cut fixed costs to $340,000. However, more labor will now be required, which will increas variable costs per unit to $53. The sales price will remain at $94. What is the new break-even point? Note: Round your answer to the nearest whole number. New break-even point units Profitability will be less Profitability will be more units c. Under the new plan, what is likely to happen to profitability at very high volume levels (compared to the old plan)?arrow_forward
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