FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Expected sales 10,000 units at $8 each
Variable costs $5 per unit
Fixed Costs $21,000
Assume $3,000 profit is expected, what is the Break-even Revenue in dollars to achieve this objective?
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- 4.3 Break-even analysis Consider the following data: Selling price $10 per unit Variable cost $6 per unit Fixed costs $1,000 How many units need to be sold to break even? 4.4 Profit targets Using the same data as in Question 4.3, if fixed costs rise by 20% and the company need to make a profit of $350, how many units need to be sold?arrow_forwardwhat is the break even sales dollars if the fixed expenses are 7,000 and the contribution ratio is 40%arrow_forwardAlvarez Company is considering the following alternatives: Alternative A Alternative B Revenues $50,000 $60,000 Variable costs 30,000 30,000 Fixed costs 10,000 16,000 What is the incremental profit? Group of answer choices $0 $6,000 $4,000 $10,000arrow_forward
- 2arrow_forwardAssume the following information: Amount Per Unit Sales $ 300,000 $ 40 Variable expenses 120,000 16 Contribution margin 180,000 $ 24 Fixed expenses 111,000 Net operating income $ 69,000 If the selling price per unit increases by 10% and unit sales drop by 5%, then the best of estimate of the new net operating income is: Multiple Choice $77,400. $82,200. $153,200. $88,500.arrow_forwardSales revenue from product X is $9,000, variable costs are $6,000, and allocated fixed costs are $4,500. If you drop product X in the short term, profit will: decrease by $1,500 O decrease by $5,250 increase by $3,000 O increase by $1,500 decrease by $3,000arrow_forward
- Break-Even Sales Currently, the unit selling price of a product is $390, the unit variable cost is $320, and the total fixed costs are $1,176,000. A proposal is being evaluated to increase the unit selling price to $440. a. Compute the current break-even sales (units) units b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased to the proposed $440, and all costs remain constant unitsarrow_forwardSales (22,200 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $ 199,800 119,880 79,920 46, 620 $ 33,300 Per Unit $9.00 5.40 $ 3.60 Required: (Consider each of the four requirements independently): 1. Assume the sales volume increases by 3,330 units: a. What is the revised net operating income? b. What is the percent increase in unit sales? c. Using the most recent month's degree of operating leverage, what is the percent increase in net operating income? 2. What is the revised net operating income if the selling price decreases by $1.10 per unit and the number of units sold increases by 23%? 3. What is the revised net operating income if the selling price increases by $1.10 per unit, fixed expenses increase by $7,000, and the number of units sold decreases by 5%? 4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 30 cents per unit, and the number of units sold decreases by 7%?…arrow_forwardCompany XYZ currently produces and sells 40,000 units. At this level, the total contribution margin is $320,000 while the total fixed costs $80,000. If sales are expected to increase by 40% in the next period, how much would the new profit be ($)? O a. 304,000 O b. 336,000 O c. 272,000O O d. 368,000 O e. None of the given answers 11:42 o search W D dx ENG 22-05-2021 hp Tort sc delete home end 96 5. + back space tock T 5 0 enter G K pause 51 ↑ shift 11 2 end alt ctriarrow_forward
- If fixed costs are $801,000 and variable costs are 66% of sales, the break-even point in sales dollars is a. $528,660 b. $3,156,882 c. $2,355,882 d. $1,329,660arrow_forwardIf fixed costs are $729,000 and variable costs are 60% of sales, what is the break-even point in sales dollars? Oa. $1,822,500 Ob. $2,551,500 Oc. $437,400 Od. $1,166,400arrow_forwardTough Tough makes two products, Rock and Hard and details are as follows: Rock Hard £ £ Selling price 20 25 Unit variable costs 11 13 Standard ratio of sales 60% 40% . Fixed costs are estimated at £1.02 million for the year and Tough is currently forecasting to generate total sales revenue of £4.4 million. Required: Calculate the break-even point in terms of total units and sales revenue, based on the forecast ratio of sales above. Sketch a profit-volume chart showing the situation in (a); show on the same chart the effect of changing the sales mix to 50% Rock and 50% Hard (keeping total forecast revenue the same). The company has realised that £325,000 of the fixed costs are only incurred by product Rock. Calculate the sales revenue required from Rock in order to cover the attributable fixed costs and provide a net contribution of £800,000 towards general fixed costs and profit.arrow_forward
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