The data for a production time-based breakeven problem is in Table 4.6.Lalculate the following items:a) Shutdown breakeven point-unitsb) Cost breakeven point-unitsc) Required return breakeven point-unitsd) Required return after taxes breakeven pointTable 4.6: Data for production time-based breakeven analysisItem$/HourDecimalSales Revenue24,000Production (Manufacturing) CostsFixed Costs12Variable Costs6.Semi-variable Costs3.4,000Overhead Costs12Required Return (Profit)Tax Rate (25%)1,5000.255.

Note: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts…

Answered: a) Shutdown breakeven point-units b)…

a) Shutdown breakeven point-units b) Cost breakeven point-units c) Required return breakeven point-units d) Required return after taxes breakeven point

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Related questions

Q: Refer to the following given information. The cost of inventory sold to customer 220,000 Advertising…

A: Ratio analysis: Ratio analysis is a tool that establishes a relationship between the different…

Q: 1. At the break-even point than a yot nisb a. Contribution margin = fixed costs b. Variable costs =…

A: Break even point resents the level of sales or revenue at which total costs (fixed costs and…

Q: Select all of the options that, if changed, would affect the break-even point. Check All That Apply…

A: Break-even point is defined as the volume of production where the total cost is equal to the total…

Q: EBITDA removes which of the following from the operating income number? a. Significant variable and…

A: Earnings Before Interest, Taxes, Depreciation, and Amortization is referred to as EBITDA. It is a…

Q: contribution margin will decrease if sales remain the same and:

A: Contribution Margin: The Contribution Margin is also can be treated on a gross or per unit basis.…

Q: Which of the following conditions would cause the break-even point to increase? Oa. total fixed…

A: The break even point the fixed cost of the production of the material is equal to the difference in…

Q: Variable costs _______ (pick all that apply) Group of answer choices 1) in total, change in direct…

A: Variable costs are the expenditure incurred on production of goods which changes in direct…

Q: Which of the following does not represent a cost-volume-profit analysis equation? a. Contribution…

A: Your choice is incorrect because option b. Is represent a cost volume profit analysis equation. The…

Q: Managers have some flexibility in setting the estimated useful lives of depreciable assets. Explain…

A: The managers can determine the useful life of assets. The depreciation per year depends on this…

Q: How will increases in the following items affect residual income? Increase in Increase in Sales…

A: The net income is calculated as difference between revenue and expenses. The residual income is…

Q: The company had an overall return on investment (ROI) of 17.00% this year (considering all…

A: Residual income is a measure of a company's profitability that calculates the excess income…

Q: Which of the following is not a correct definition of the breakeven point? A.the point where total…

A: At Breakeven Point, Total Profits are equal to zero, Contribution Margin equal to Total Fixed…

Q: (Profit) What is the impact of decreasing/increasing radius kettle (m) with regarding to heat time?…

A: Just as radius kettle (m) and heat time are correlated so is profits being earned or generated by a…

Q: Which of the following does not represent a cost-volume-profit analysis equation? O a. Sales - fixed…

A: Cost-volume-profit equation: Profit = Revenue – Fixed Costs – Variable Costs

Q: Problem Three: ) Given the revenue function R(x) = x³+ 3x²+ x Find the average revenue of producing…

A: I) Average revenue is the price per unit sold Average revenue = Total revenue / No. of units…

Q: Gross margin is included on the income statement under which format(s)? A) B) C) D) Contribution…

A: Gross Margin is included on the income statement under traditional approach. Gross Margin = Sales -…

Q: ADAM COMPANY HAS AN OLD MACHINE THAT COST WHEN PURCHASED $150000, THE FIRM DEPRECIATION METHOD IS…

A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: What is the relationship between revenue and net income on the Income Statement? As contribution…

A: Revenue represents the total income generated by a company from its primary operations, such as…

Q: The cost of PPE includes which of the following : Its invoice price, less any cash discount for…

A: The cost of PPE includes all those expenses which are incurred directly on the PPE for making that…

Q: By modifying the break-even equation, a company is able to determine the sales required to earn a…

A: · CVP analysis is used to identify the changes in costs and volume affect a company's…

Q: Let P(x) be the annual profit for a certain product, where x is the amount of money spent on…

A: Solution- (A) P(o) represents the amount of annual profit allocated when x=0 or when no money was…

Q: The market compensates investors for accepting which type(s) of risk? O None of the listed…

A: Risk refers to the level of uncertainty in returns that an investor expects while making…

Q: Incremental costs are the ________ generated by a proposed alternative. A) additional revenues B)…

A: Incremental costs are the total additional costs incurred or the

Q: When the contribution margin is not sufficient to cover fixed expenses: Multiple Choice total profit…

A: The contribution margin is calculated as difference between sales and variable costs. The excess of…

Q: Henderson Farms reports the following results for the month of November: Sales (10,000 units)…

A: Income statement is a financial statement that shows profitability, total revenue and total expenses…

Q: Given below in two contributions which option is good and why? Profit=unit sold × unit contribution…

A: Break-even point is the number of sales units that is sufficient to cover all the fixed and variable…

Q: Interpret the figure below: find (a) Presen additional maintenance cost, (b) Present worth of all…

A: Present value is the equivalent value today of the future cost based on the time period and interest…

Q: All else being equal, what happens to the unit contribution margin and the contribution margin ratio…

A: Contribution margin is the margin of profits of any enterprise which is essentially a function of…

Q: Complete comparative income statements for the month of January for Laker Company for the four…

A: The inventory can be valued using various methods such as LIFO, FIFO, weighted average, and specific…

Q: The amount of a unit’s sales price that helps to cover fixed expenses is its ________.

A: In order to cover the fixed expenses

Q: Direct Energy has two options for upgrading a natural gas power station to meet new government…

A: To calculate NPV in case if the equipment is purchased we will have to calculate the present value…

Q: Which of the following does not represent a cost-volume-profit analysis equation? Profit…

A: Cost-Volume profit Analysis:- It is a method of cost accounting which look for the impact of cost…

Q: Find the missing quantities. If there is no absolute loss, write "none." Breakeven Point Reduced…

A: The Breakeven Point is the level at which the cost of the production is equal to the revenue of the…

Q: the best technique to use in valuing a tangible loss is: A) A replacement cost B) Market Values C)…

A: Tangible loss means the direct loss of money or property such as lost wages etc.

Q: (a) What is the gross margin now? Gross margin (b) What is the net operating income now? Net…

A: Solution Concept Let us look at the formula used Gross margin = sales – cost of goods sold Net…

Q: What will be the revenue generated at the break-even point?

A: Break even point is a point wherein the firm does not earn any profit nor incurs any loss.

Q: 1-The amount of money paid for the use of borrowed capital or from the money that has been loan.…

A: Entities and individuals usually borrow money to finance large projects or buy items like a house or…

Q: The difference, (Total Revenue - Total Cost) or [(Unit Price x Quantity Sold) - (Fixed Variable…

A: Income statement is a financial statement that shows profitability, total revenue and total…

Q: Question (1): Mark "True" for the correct phrases and "False" for the * incorrect phrases alse True…

A: Present worth converts difference between revenue and cost of a project to the present value using…

Q: Question 1: Which statement about budgets is incorrect? Answer: A. B. C. D. O They determine the…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: 1. The value deducted from the revenue stream, which usually has no obligation toward covering…

A: Disclaimer: Since you have asked multiple questions we have answer first question please upload…

Question

100%

The data for a production time-based breakeven problem is in Table 4.6.
Lalculate the following items:
a) Shutdown breakeven point-units
b) Cost breakeven point-units
c) Required return breakeven point-units
d) Required return after taxes breakeven point
Table 4.6: Data for production time-based breakeven analysis
Item
$/Hour
Decimal
Sales Revenue
24,000
Production (Manufacturing) Costs
Fixed Costs
12
Variable Costs
6.
Semi-variable Costs
3.
4,000
Overhead Costs
12
Required Return (Profit)
Tax Rate (25%)
1,500
0.25
5.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2 : Part a

Step 3 : Part b

Step 4 : Part c

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

O d. Contribution margin - fixed expenses - profit = 0 O e. Sales - fixed expenses - variable expenses = 0 Holding other factors constant, a company's contribution margin per unit will increase with: a. All answers given are NOT correct. b. any decrease in the selling price per unit O c. any increase in variable cost per unit O d. increase in its total fixed costs e. any increase in quantity sold. PAGE NEXT PA COLL CET 0001 A
Under a Cost-Plus approach, what is the interest rate (price) you will offer to your customers? Do not type the % symbol. Operating Expense per unit of deposit 3% Overhead Expense allocated per unit of deposit 2% Planned Profit Margin 3%
18) Using the equation method, Breakeven point is calculated as__________. Sales+ profit=variable expenses+ fixed expenses Sales=variable expenses+ fixed expenses+ profit Sales+ variable expenses-fixed expenses+ profit Profit- fixed expenses= sales- variable expenses
“profit earned if operating capacity at the end of the period is greater than the operating capacity at the beginning of the period”, this definition of profit is in line with: Select one: a. none of above b. Purchasing power maintenance c. Financial capital maintenance d. Physical operating capital maintenance
1. To compute the breakeven point using the contribution margin, we get the ratio of a. Total fixed expenses and Total contribution margin b. Total variable expenses and Total Contribution margin c. Total fixed expenses and Contribution margin per unit d. Total variable expenses and Contribution margin per unit 2. A mathematical expression that describes a breakeven point of a company is a. Sales Revenue = Variable expenses + Fixed expenses b. Sales Revenue = Variable expenses - Fixed expenses c. Sales Revenue < Variable expenses + Fixed expenses d. Sales Revenue > Variable expenses - Fixed expenses 3. The Cost-Volume-Profit equation is given by a. Sales Revenue = Profits + Contribution margin ratio + Fixed expenses b. Sales Revenue = Profits + Contribution margin + Fixed expenses c. Sales Revenue = Profits+ Variable expenses + Fixed expenses d. Sales Revenue = Profits -Variable expenses…
On the break-even chart you can see the three variants of the break-even points. Name the items marked with numbers in the figure. Choose the correct answers. 7 10 6 Choose... Choose... 7 Choose... 1 Choose... 9. Choose... v Choose... Total cost function (linear) Turning point of profitability Target profit (expected profit) Turning point of economic efficiency Volume Amortisation Total cost - amortisation Total revenue function Turning point of liquidity Total cost + Target profit
Net Operating Income (-) Interest Expense (-) Cost Recovery Allowance (=) _________________ (or) NOI (minus) Interest Expense (minus) Cost Recovery Allowance (equals) ___________________ Group of answer choices
26..
Target profit is added to what other financial statement line item, or element, to determine the numerator in the overall target contribution margin (CM) calculation in break-even analysis? Variable costs Fixed costs Net income after taxes Operating profit
Your answer is incorrect. Divide the estimated average annual income by the average investment. Investment cost plus residual value, divided by two, equals average investment. Can you please redo it? Thanks
All of the following represents a cost-volume-profit relationship except: a. Total contribution margin + variable xpenses = variable expenses + fixed expenses profit b. Sales = totalexpe expenses + profit O cSales - variable senses + profit = fied expenses O d. Profit = totalcontri contribution margin- fixed expenses O e Sales - Variable expenses = fixed expenses + profit
using the price p=20 - .05x, use the Revenue function to find the marginal Revenue function R'(x), Find a. R'(100)= b. R'(175)= c. R'(250)= The marginal Revenue R'(x) approximates how the revenue will change on the sale of the next item. a. Given R(100) = 642 and R'(100)= 18 then R(101) ≈ b. Given R(400) = 16,250 and R'(400)= -10 then R(401) ≈ c. Given R(1000) = 3500 and R'(1000) = 3 then R(1001) ≈

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS