EXERCISE 5-6 Break-Even Analysis LO5-5 Mauro Products distributes a single product, a woven basket whose selling price is $15 per unit and whose variable expense is $12 per unit. The company's monthly fixed expense is $4,200. Required: 1. Calculate the company's break-even point in unit sales. 2. Calculate the company's break-even point in dollar sales. 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales?

EXERCISE 5-6 Break-Even Analysis LO5-5 Mauro Products distributes a single product, a woven basket whose selling price is $15 per unit and whose variable expense is $12 per unit. The company's monthly fixed expense is $4,200. Required: 1. Calculate the company's break-even point in unit sales. 2. Calculate the company's break-even point in dollar sales. 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Exercise 6-6 Break-Even Analysis [LO6-5] Mauro Products distributes a single product, a woven basket whose selling price is $30 per unit and whose variable expense is $26 per unit. The company's monthly fixed expense is $10,000. Required: 1. Calculate the company's break-even point in unit sales. 2. Calculate the company's break-even point in dollar sales. (Do not round intermediate calculations.) 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.) 1. Break-even point in unit sales başkets 2. Break-even point in dollar sales 3. Break-even point in unit sales baskets Break-even point in dollar sales
EXERCISE 5–18 Break-Even and Target Profit Analysis; Margin of Safety; CM Ratio [LO5–1, LO5–3, LO5–5, LO5–6, LO5–7] Menlo Company distributes a single product. The company’s sales and expenses for last monthfollow: {picture11} Required:1. What is the monthly break-even point in unit sales and in dollar sales?2. Without resorting to computations, what is the total contribution margin at the break-even point?3. How many units would have to be sold each month to earn a target profit of $90,000? Use the formula method. Verify your answer by preparing a contribution format income statement at the target sales level.4. Refer to the original data. Compute the company’s margin of safety in both dollar and percentage terms.5. What is the company’s CM ratio? If sales increase by $50,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?
Assignment 5.1: Session 5 Comprehensive Problem Problem 5-1 Redlands Inc. sells one product for $5. The variable cost per item is $3, and the fixed costs for the firm are $40. Required: a. Compute the breakeven point in units. b. Compute the number of units and sales revenue needed to achieve a $20 profit. (Ignore income taxes.) c. Assume that the income tax rate for Redlands is 40%. Compute the number of units and sales revenue needed to achieve an $18 net profit. d. Compute the number of units and sales revenue needed to achieve an 8% profit margin. (Ignore income taxes.) e. Compute the number of units and sales revenue needed to achieve a 12% net profit margin. (Assume a 40% income tax rate.) f. Assume that Redlands currently sells 40 units. Redlands estimates that if it increased sales price to $6 per unit demand would decrease by 10%. Determine if Redlands should increase its selling price. (Ignore income taxes.) g. Assume that Redlands currently sells 30 units and has a 40%…
Exercise 5-6 (Algo) Break-Even Analysis [LO5-5] Mauro Products distributes a single product, a woven basket whose selling price is $10 per unit and whose variable expense is $8 per unit. The company's monthly fixed expense is $4,400. Required: 1. Calculate the company's break-even point in unit sales. 2. Calculate the company's break-even point in dollar sales. (Do not round intermediate calculations.) 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.) 1. Break-even point in unit sales 2. Break-even point in dollar sales 3. Break-even point in unit sales 3. Break-even point in dollar sales baskets baskets
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Exercise 5-4 (Algo) Break-Even Analysis [LO5-4] Mauro Products sells a woven basket for $14 per unit. Its variable expense is $10 per unit and the company's monthly fixed expense is $4,000. Required: 1. Calculate the company's break-even point in unit sales. 2. Calculate the company's break-even point in dollar sales. Note: Do not round intermediate calculations. 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? Note: Do not round intermediate calculations. 1. Break-even point in unit sales 2. Break-even point in dollar sales 3. Break-even point in unit sales 3. Break-even point in dollar sales baskets baskets
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QUESTION 5 Break-Even Point Bigelow Inc. sells a product for $800 per unit. The variable cost is $600 per unit, while fixed costs are $1,200,000. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $850 per unit. a. Break-even point in sales units fill in the blank 1 units b. Break-even point if the selling price were increased to $850 per unit fill in the blank 2 units
Exercise 6-7 Target Profit Analysis [LO6-6] Lin Corporation has a single product whose selling price is $120 per unit and whose variable expense is $80 per unit. The company’s monthly fixed expense is $50,000. Required: 1. Calculate the unit sales needed to attain a target profit of $10,000. (Do not round intermediate calculations.) 2. Calculate the dollar sales needed to attain a target profit of $15,000. (Round your intermediate calculations to the nearest whole number.)
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