An organization's break-even point is 6,000 units at a sales price of P50 per unit, variable cost of P35 per unit, and total fixed costs of P90,000. If the company sells 500 additional units, by how much will its profit increase?

An organization's break-even point is 6,000 units at a sales price of P50 per unit, variable cost of P35 per unit, and total fixed costs of P90,000. If the company sells 500 additional units, by how much will its profit increase?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 6MC: If a company has fixed costs of $6.000 per month and their product that sells for $200 has a...

See similar textbooks

Related questions

Q: If a company has fixed costs of $6.000 per month and their product that sells for $200 has a…

A: Formula: Break even sales dollars = Fixed cost / contribution margin ratio

Q: If each sales rep earns a salary of €60,000 per year, whatsales are necessary to break even on the…

A: Break-Even Point: It refers to a point of production at which there is no profit no loss.

Q: The Doral Company manufactures and sells pens. Currently , 5 , 000 , 000 units are sold per year at…

A: Breakeven point in revenue means the sales made to cover entire fixed costs and earn neither profit…

Q: The company produced and sold 14,000 units last year with sales price of $50 per unit and unit…

A: Current profit = (sales price- variable costs) x no. of units sold - fixed costs =…

Q: Spice Inc.'s unit selling price is $51, the unit variable costs are $38, fixed costs are $102,000,…

A: Formula: Contribution margin = Selling price - variable cost

Q: Last year Minden Company introduced a new product and sold 15,000 units of it at a price of $70 per…

A: In this question, we will find a breakeven point in dollar sales which can be calculated by dividing…

Q: A company has fixed costs of 100,000 and break-even sales of 800,000. What is its projected profit…

A: Business has $0 profit at the break-even sales. At break even sales of $800,000 Sales = $800,000…

Q: XYZ company currently sells 15,000 units a month for $50 each, has variable costs of $10 per unit,…

A: Target sales = (Fixed Cost-Desired Income)/contribution per unit

Q: Micol & Co. Ltd sells a single product, baby hamper, with a selling price of $150 and variable costs…

A: Margin of safety means the difference between the budget sales and breakeven sales. It means the…

Q: Levi Company has revenues of P500,000, variable costs of P300,000, and pretax profit of P150,000. If…

A: Solution:- calculation of the new breakeven point (in pesos) as follows under:- The following…

Q: Company XYZ currently produces and sells 40,000 units. At this level, the total contribution margin…

A: Hi student Since there are multiple question, we will answer only first question.

Q: A firm has the capacity to produce 1,000,000 units of a product per year. At present, it is able to…

A: Break-even is the point wherein the company is in a situation of no profit no loss.

Q: An organization's break-even point is 4,000 units at a sales price of P50 per unit, variable cost of…

A: Given: Selling price = P50 Variable cost = P30 Additional units sold = 500 Fixed cost = P80,000

Q: Suppose ABC Corp’s break-even point is revenues of $1,100,000. Fixed costs are $660,000A ACalculate…

A: Contribution Margin is the excess of unit selling price on the unit variable costs. Contribution…

Q: A company sells their product for $300 per unit and has fixed costs of $60,000 per month. If they…

A: Contribution margin ratio shows revenue over and above variable costs.

Q: Suppose ABC Corp’s break-even point is revenues of $1,100,000. Fixed costs are $660,000 a.…

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: Mazoon Company has fixed costs of $12,000 and a breakeven point of 600 units. If the company plans…

A: Breakeven point in units = Fixed costs/ Contribution margin per unit Oeprating income = Contribution…

Q: If the company has a target profit of $15,000, how many units must be sold

A: Breakeven point: Breakeven point is the point at which the company makes no profit nor loss or it is…

Q: Variable costs as a percentage of sales for Lemon Inc. are 80%, current sales are $600,000, and…

A: Break-even analysis is used to measure the required sale to recover its total cost.It can be…

Q: Barometers sell for $300 each. Variable costs are $200 per unit, fixed production costs are $2,000,…

A: Profit is the excess of revenue over cost. Profit can be found out by deducting cost price from…

Q: Currently, a company has fixed costs of P32,500, a contribution ratio of 65%, and is selling its…

A: Breakeven sales: It the level of sales at which the business does not make any profit nor does it…

Q: product sells for P60 per unit and has a CM ratio of 40%. The company's fixed expenses are P360,000…

A: The break-even point is the point at which there is neither profit nor loss. That means, how many…

Q: Stellar Company has the following sales, variable cost, and fixed cost. If sales increase by $10,000…

A: Given Sales = $50000 Variable Cost = $9600 Fixed Cost = $27000 Profit before the increase is :

Q: Baker Company has a product that sells for $20 per unit. The variable expenses are $12 per unit, and…

A: The break even sales are the sales where business earns no profit no loss during the period.

Q: Lindon Company is the exclusive distributor for an automotive product that sells for $46.00 per unit…

A: Break-even analysis is a technique used widely by the management for decision-making. It helps to…

Q: Frank Corporation manufactures a single product that has a selling price of S30.00 per unit. Fixed…

A: Formula used: Units to be sold to earn a target profit = ( Fixed cost + target profit ) / Unit…

Q: Lindon Company is the exclusive distributor for an automotive product that sells for $40 per unit…

A: As the question has more than 3 sub-parts, the first 3 subparts are answered. If you want the answer…

Q: Suppose ABC Corp’s break-even point is revenues of $1,100,000. Fixed costs are $660,000. Calculate…

A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…

Q: If a firm with $49,000 in fixed costs breaks even on 7,000 units, how many units must the firm sell…

A: Whenever sales generated and costs incurred within a specific period are equal, a corporation breaks…

Q: Glassman Company sells its one product at $30 per unit. Variable costs are $25 per unit and fixed…

A: Break-even point in units = Fixed costs / (Selling price - Variable costs) Break-even point in sales…

Q: Ratchet Ltd expects to sell 30,000 units this year. The selling price is set at $25 per unit. The…

A: Cost volume profit analysis is useful to find out the different sales volume on the basis of…

Q: A company that manufactures ceramic cups has a fixed costs amounting to P270,000 per month Variable…

A: The following information is provided as follows:- Fixed cost per month = P270,000 Variable cost =…

Q: A firm has fixed costs of P200,000 and variable costs per unit of P6. It plans on selling 40,000…

A: Target profit before tax = P24,000/(100%-40%) Target profit before tax = P24,000/60% Target profit…

Q: Company XYZ currently produces and sells 40,000 units. At this level, the total contribution margin…

A: The Calculation of Profit is as follows: Contribution = Sales - Variable Costs…

Q: The Warren Watch Company sells watches for $29, fixed costs are $180,000, and variable costs are $10…

A: Calculate the gain or loss for 7,000 watches as follows: Gain or (loss) = Total contribution - Fixed…

Q: Compute the break-even point in units. 2) How many units…

Q: The Vetron Company is planning to produce two products, Tig and Lam. Vetron is planning to sell…

A: Solution: - Calculation of Break-even point of "Tig" as follows under(In pesos):-

Q: what is the minimum selling price the company will have to charge per unit?

A: Given in the question: Monthly Fixed Costs = £230,000 Marginal Cost per Unit = £76 Profit required…

Q: Calculating breakeven point in units, contribution margin ratio given Ocean Company sells a product…

Q: A company with fixed costs of P40,000 is now breaking even on sales of P160,000. How much income…

A: Break-even analysis is a technique widely used by the production department. It helps to determine…

Q: a. What is the break-even point in units? b. What is the break-even point in dollars? c. If Weber…

A: Break-even analysis is one of the most important quantitative techniques that is used in the…

Q: The Charleston Company has fixed costs of Birr 20,000 per month, and variable costs of Birr 15 per…

A: Profit = Sales - Variable Cost - Fixed Cost

Q: Golden Corporation contemplates to market a new product. Estimated fixed costs is P1,000,000. The…

A: The contribution margin is calculated y deducting the variable cost from the net sales of the…

Q: Micol & Co. Ltd sells a single product, baby hamper, with a selling price of $150 and variable costs…

A: Breakeven units is the units where at those units there is no loss or no profit. Breakeven in units…

Q: National Co. has revenue of P500,000, variable costs of P300,000 and pretax profit of P150,000. If…

A: Answer) Calculation of New Break-eve Point New Break-even Point = Revised Fixed Cost/ Revised…

Q: Brolin Company sells a single product. The product has a selling price of $50 per unit and variable…

A: Solution : Contribution margin ratio = 100% - variable cost ratio = 100% - 80% = 20%

Q: n organization's break-even point is 4,000 units at a sales price of $50 per unit, variable cost of…

A: Step 1 Break even point is the production level at which total revenues for a product equal total…

Q: Darigold, Inc. sells Product M for P5 per unit. The fixed cost is P210,000 and the variable cost is…

A: Cost-volume-profit (CVP) analysis is an important and systematic method which provides useful…

Question

type the correct answwer for the ;problem bellow

An organization's break-even point is 6,000 units at a sales price of P50 per unit, variable cost
of P35 per unit, and total fixed costs of P90,000. If the company sells 500 additional units, by
how much will its profit increase? *

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 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, accounting and related others by exploring similar questions and additional content below.

Similar questions

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?
If a company has fixed costs of $6.000 per month and their product that sells for $200 has a contribution margin ratio of 30%, how many units must they sell in order to break even? A. 100 B. 180 C. 200 D. 2,000
An organization's break-even point is 4,000 units at a sales price of P50 per unit, variable cost of P30 per unit, and total fixed costs of P80,000. If the company sells 500 additional units, by how much will its profit increase?
An organization's break-even point is 4,000 units at a sales price of P50 per unit,variable cost of P30 per unit, and total fixed costs of P80,000. If the companysells 500 additional units, by how much will its profit increase? A. P25,000B. P15,000C. P10,000D. P12,000
Suppose ABC Corp’s break-even point is revenues of $1,100,000. Fixed costs are $660,000. Calculate the contribution margin percentage. Calculate the selling price if variable costs are $16 per unit. Suppose 75 000 units are sold, calculate the profit earned. Willo the company beprofitable if able to sell 30,000 units? Explain. What should the company do to increase its profit above break-even point.
A firm has fixed costs of P200,000 and variable costs per unit of P6. It plans on selling 40,000 units in the coming year. To realize a profit of P20,000, the firm must have a sales price per unit of at least * a. P11.00. b. P11.50. c. P10.00. d. P10.50.
Suppose ABC Corp’s break-even point is revenues of $1,100,000. Fixed costs are $660,000A ACalculate the contribution margin percentage. B. Calculate the selling price if variable costs are $16 per unit.c. Suppose 75 000 units are sold. Calculate the profit earned. D. Will the company be profitable if able to sell 30,000 units? Explain. c. What should the company do to increase its profit above break-even point?
1. What is the breakeven point in dollars if annual fixed costs are 114,000 and Cost to Overhead is 0.65? 2. Taking information from the previous problem, if the objective of the firm is to get 25% profit, how many units does it have to sell if the price per unit is $250?
PROBLEM SOLVING: (show step by step solution) Break-even and target profits. Analysis of the operations of FAST Company shows the fixed costs to be P200,000 and the variable costs to be P8 per unit. Selling price is P16 per unit. Derive the break-even point expressed in units. How many units must the firm sell to earn a profit of P280,000? What would profits be if revenue from sales were P2,000,000?
A company with fixed costs of P40,000 is now breaking even on sales of P160,000. How much income can be expected on sales of P200,000?
A company's breakeven sales (BES) is P 600,000. If fixed costs would increase by 10% of this BES, such BES would increase by 40%. a. What is the company's variable cost ratio b. How much is fixed costs of the new BES level?
A company sells its product at P18 per unit. Variable costs are P12 per unit and fixed costs are 150,000 per annum. The company wants to realize a profit of P60,000 during the year. What should be the sales revenue?