If total fixed cost of company increases from $250,000 to $300,000, variable cost remainsunchanged at $2 per unit, and selling price increases from $10 to $11.50. How the above changes will affect break-even point in units?
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- Holding other factors constant, a company's contribution margin per unit will increase with: a. any increase in variable cost per unit O b. any increase in quantity sold. Oc. any increase in the selling price per unit O d. increase in its total fixed costs O e. All answers given are NOT correct. If sales are $20,000, variable costs are $8,000, and fixed costs are $2,000, the contribution margin rati is: (rounded to the nearest number) ed O a. 10% z of O b. 50% F1 F2 F3 F4 F5 F6 F7 F8 F9 %23 2$ & 2 4 6. 7 8. Q E R T Y A S F C { V }BYNI > 1.If total fixed cost of company increases from $250,000 to $300,000, variable cost remainsunchanged at $2 per unit, and selling price increases from $10 to $11.50. How the above changes will affect break-even point in units? A)The break-even point in units will decrease. B)None of the other. C)The break-even point in units will increase. D)The break-even point in units will remain same.A projected income statement of Hailwork’s company for the coming year follows: Sales $506300 |Total Variable Cost 170865 Contribution Margin ? Total Fixed Cost 175000 Operating Income ? Compute contribution margin and contribution margin ratio Compute the Operating Income How much revenue must be earned in order to breakeven What is the effect on contribution margin ratio if the unit selling price and unit variable cost increase by 10 percent each?
- a.Explain why contribution margin per unit becomes profit per unit above the break-even point b. If the contribution margin per unit is $7 and the break-even point is 10,000 units, how much profit will a firm make if 15,000 units are sold? c.What is the variable cost ratio? The contribution margin ratio? How are the two ratios related?If a company increases its selling price by P2 per unit due to an increase in its variable labor cost of P2 per unit, the break-even point in pesos will: A. decrease B. increase C. not change D. change but direction is uncertainA company increased the selling price for its product from P1.00 to P1.10 a unit when total fixed costs increased from P400,000 to P480,000 and variable cost per unit remained unchanged. How would these changes affect the breakeven point? A. The breakeven point in units would be increased.B. The breakeven point in units would be decreased.C. The breakeven point in units would remain unchanged.D. The effect cannot be determined from the information given.
- Which of the following changes to a company's contribution income statement will always lower the break-even point (either in units or in dollars)? Sales price increases by 10%. Variable costs decrease by 5% and fixed costs increase by 10%. Variable costs increase by 10% and fixed costs decrease by 5%. Sales price decreases by 5%.A firm presently has total sales of P100,000. If its sales rise, its A. net income based on variable costing will go up more than its net income based on absorption costing. B. net income based on absorption costing will go up more than its net income based on variable costing. C. fixed costs will also rise. D. per unit variable costs will riseAA Company produces and sells refrigerator magnets to be sold as novelty items by resorts. Last year, the company sold 198,400 units. The income statement for AA Company for last year is as follow: $992,000 545,600 $446,400 Sales Less: Variable expenses Contribution margin Less: Fixed expenses 180,000 $266,400 Operating Income How much was the margin of safety in revenue for last year? (Answer format: $123,456.78) * Your answer Suppose that the selling price decreases by 8 percent. How much is the revised breakeven point in units? (Answer format: 123.45) * Your answer
- Suppose Morrison Corp.’s breakeven point is revenues of $1,100,000. Fixed costs are $660,000. Q1. Compute the contribution margin percentage. Q2. Compute the selling price if variable costs are $16 per unit. Q3. Suppose 75,000 units are sold. Compute the margin of safety in units and dollars. Q4. What does this tell you about the risk of Morrison making a loss? What are the most likely reasons for this risk to increase?The following information relates to the operations of a company; cost per unit from supplier- GH¢80, variable cost per unit GH¢40 and total fixed cost of GH¢300000. The company determines its selling price by adding a margin of 20%. What is the breakeven quantity?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?