Fruit Computer Corporation makes custom fruit shaped computers. It is currently producing 40 computers per month. Data are as follows: Sales price per unit $800 Variable cost per unit. 600 Fixed costs per month 7000 If Fruit Computer Corporation expects to sell 60 units per month, how much is its margin of safety expressed in sales revenue? O $15,000 O $28,000 O $48,000 O $20,000

Fruit Computer Corporation makes custom fruit shaped computers. It is currently producing 40 computers per month. Data are as follows: Sales price per unit $800 Variable cost per unit. 600 Fixed costs per month 7000 If Fruit Computer Corporation expects to sell 60 units per month, how much is its margin of safety expressed in sales revenue? O $15,000 O $28,000 O $48,000 O $20,000

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 10E: Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22...

See similar textbooks

Similar questions

Fruit Computer Corporation makes custom fruit shaped computers. It is currently producing 60 computers per month. Data are as follows: Sales price per unit $800 Variable cost per unit 600 Fixed costs per month 5600 If Fruit Computer Corporation expects to sell 50 units per month, how much is its margin of safety expressed in sales revenue? O $22,400 O $13,200 O $17,600 O $40,000
On-the-Go, Inc., produces two models of traveling cases for laptop computers—the Programmer and the Executive. The bags have the following characteristics. Programmer Executive Selling price per bag $ 70 $ 100 Variable cost per bag $ 30 $ 40 Expected sales (bags) per year 8,000 12,000 The total fixed costs per year for the company are $819,000. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix is the same at the break-even point, compute the break-even point. c. If the product sales mix were to change to nine Programmer-style bags for each Executive-style bag, what would be the new break-even volume for On-the-Go?
Woodland Wearables produces two models of a smart watch, the Basic and the Flash. The watches have the following characteristics: Basic Flash Selling price per watch $ 450 $ 550 Variable cost per watch $ 370 $ 310 Expected sales (watches) per year 75,000 25,000 The total fixed costs per year for the company are $1,632,000. Required: What is the anticipated level of profits for the expected sales volumes? Assuming that the product mix is the same at the break-even point, compute the break-even point in units. If the product sales mix were to change to nine Basic watches for each Flash watch, what would be the new break-even volume for Woodland Wearables?
Derby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics. Sales price $ 22 per unit Variable costs 5 per unit Fixed costs 25,000 per month Assume that the projected number of units sold for the month is 7,000. Consider requirements (b), (c), and (d) independently of each other. Required: b. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent? c. What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent?
Woodland Wearables produces two models of a smart watch, the Basic and the Flash. The watches have the following characteristics: Selling price per watch Variable cost per watch Expected sales (watches) per year Basic $ 260 Flash $ 455 $ 180 18,000 $ 215 6,000 The total fixed costs per year for the company are $1,449,600. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix is the same at the break-even point, compute the break-even point in units. c. If the product sales mix were to change to nine Basic watches for each Flash watch, what would be the new break-even volume for Woodland Wearables? Complete this question by entering your answers in the tabs below. Required A Required B Required C What is the anticipated level of profits for the expected sales volumes? Anticipated profit
Green Corporation expects to sell 3,000 plants a month. Its operations manager estimated the following monthly costs: Variable costs P 7,500; Fixed costs 15,000. What sales price per plant does she need to achieve to begin making a profit if she sells the estimated number of plants per month? A. P7.51B. P7.50C. P5.00D. P2.50
4. If the price of the material is RO 15 per unit and the annual consumption is 4000 units, the interest and store keeping charges are 20% of the value and the cost of placing of an order and receiving the goods is RO 60, how much material should be ordered at one time? 5. Alexander pump LLC uses about 75000 valves per year and the usage is fairly constant at 6250 units per month. The valve cost of RO 1.50 per unit when bought in large quantities, and the carrying cost is estimated to be 20% of average inventory investment on an annual basis. The cost to place an order and process the delivery is RO18. It takes 45 days to receive delivery from the date of an order and a safety stock of 3250 vales is desired. You are required to determine. a. The most economical order quantity and frequency of orders. b. The most economical order quantity if the valves cost is RO 4.50 each instead of RO 1.50 each
Sopot Swim Co. manufactures and sells swimming suits. The foxed costs of operating the company we $100.000 per month and variable costs are $10 per swimming suit. The swimming suits are sold for $20 per unit. The production city is 120.000 caps per month. What is the break-even point in sales dollars? $10. $120,000 $200,000 O $500,000 O $10.000
Bosco Company sells boxes of cookies and has total fixed costs of $200,000 per month. Variable costs are $8 per box, selling price is $10. The company desires to make a profit of $100,000 per month. a. What is number of boxes that most be sold to break even each month? b. What is the contribution margin ratio? c. What is the $ amount of monthly sales needed in order to make the desired monthly profit?
Derby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics. Sales price $ 23 per unit Variable costs 6 per unit Fixed costs 24,000 per month Assume that the projected number of units sold for the month is 6,000. Consider requirements (b), (c), and (d) independently of each other. Required: What will the operating profit be? What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent? What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? Suppose that fixed costs for the year are 10 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much?
Derby Phones is considering the introduction of a new model of headphones with the following price and cost characteristics. Sales price $ 305 per unit Variable costs 140 per unit Fixed costs 379,500 per month Required: a. What number must Derby sell per month to break even? b. What number must Derby sell to make an operating profit of $214,500 for the month?
Hyde Co has just finished developing Product Z. The sales price of Product Z has been set at $99 per unit and 750 units are expected to be sold. $40,000 has been invested in Product Z and a 20% return on investment is required. What is the target cost per unit for Product Z? Select... Y Select... $88.33 $79.20 $64.00 $66.67