Flying Cloud Co. has the following operating data for its manufacturing operations: Unit selling price $218 Unit variable cost $118 Total fixed costs $831,000 The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%. Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%. If sales prices are held constant, the next break-even point for Flying Cloud Co. will

Flying Cloud Co. has the following operating data for its manufacturing operations: Unit selling price $218 Unit variable cost $118 Total fixed costs $831,000 The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%. Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%. If sales prices are held constant, the next break-even point for Flying Cloud Co. will

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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XYZ Inc. sells a single product for $30 per unit. Variable production costs are $18 per unit. Fixed overhead costs amount $20,000 per month. Variable selling costs are $3 per unit. Fixed selling costs are $4,000 per month. Last month, the company produced 10,000 units and sold 8,000 units. What is the company’s margin of safety? a. $160,000 b. $80,000 c. $40,000 d. $20,000
The fixed costs of Anton, Inc. are $354,000 and the total variable costs for its only product are 45% of the sales price, which is $140. Anton currently sells 5,700 units per month and is looking to sell more. Consider each of the following independently: Part A The marketing manager thinks sales are too low in Georgia and suggests that sales there would be increased by 240 units per month if an additional $8,000 per month was spent advertising there. What should be the effect on monthly income if this additional advertising is done? (Increase by 10480, 7120, 447905, or 5645?) Part B Management is considering adding a new feature to its product that will cause an increase in variable costs of $9 per unit. It is expected that sales will increase by 710 units per month if this feature is added. If the feature is added, what should be the overall effect on the company's monthly income? (Decrease by 3020, 12,960, 3519, or increase by 48280?) Part C The marketing manager is considering…
morning view industries manufactures and sells a product for $100 per unit. the annual fixed costs of manufacturing and selling the product are $85,840 and the variable costs are $65 per unit. the company’s break‑even point in units is
Flying Cloud Co. has the following operating data for its manufacturing operations: Unit selling price $211 Unit variable cost $115 Total fixed costs $755,000 The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%. Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%. If sales prices are held constant, the next break-even point for Flying Cloud Co. will be Oa. increased by 1,142 units Ob. decreased by 1,428 units Oc. increased by 1,428 units Od. increased by 1,713 units
Drake Company produces a single product. Last year's income statement is as follows:Sales (23,000 units) $1,384,600Less: Variable costs 938,400 Contribution margin $ 446,200Less: Fixed costs 258,500 Operating income $ 187,700 3. Suppose that Drake Company is considering an investment in new technology that willincrease fixed costs by $227,800 per year, but will lower variable costs to 48 percent of sales.Units sold will remain unchanged. a) Prepare a budgeted income statement assuming Drakemakes this investment. (Round all amounts to the nearest dollar.) b) What is the new breakeven point in units, assuming the investment is made? (In your computations, round the unitcontribution margin to the nearest cent. Round your final answer to the nearest whole unit.)
Flanders Manufacturing is considering purchasing a new machine that will reduce variable costs per part produced by $0.15. The machine will increase fixed costs by $18,250 per year. Flanders Manufacturing data Current Units sold 216,000 Sales price per unit $2.15 Variable cost per unit $1.75 Contribution margin per unit $0.40 Fixed costs $56,000 Break-even (in units) 140,000 Break-even (in dollars) $301,000 Sales $464,400 Variable costs $378,000 Contribution margin $86,400 Fixed costs $56,000 Net income (loss) $30,400 A) What will the impact be on the break-even point if Flanders purchases the new machinery? New break-even point in units? New break-even point in dollars? B) What will the impact be on net operating income if Flanders purchases the new machinery? New net income(loss)?
Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit of $360. The company's monthly fixed expenses are $72,000. A. What is the company's break-even point in units? B. What is the company's break-even point in dollars?
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Flying Cloud Co. has the following operating data for its manufacturing operations: Unit selling price $202 Unit variable cost $103 Total fixed costs $801,000 The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%. Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%. If sales prices are held constant, the next break-even point for Flying Cloud Co. will be a.increased by 1,561 units b.increased by 1,301 units c.decreased by 1,301 units d.increased by 1,041 units
Flying Cloud Co. has the following operating data for its manufacturing operations: Unit selling price $ 250 Unit variable cost 100 Total fixed costs 840,000 The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%. Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%. If sales prices are held constant, the next break-even point for Flying Cloud Co. will be a. increased by 800 units b. increased by 640 units c. decreased by 640 units d. increased by 400 units