Ojo Outerwear Corporation can manufacture mountain climbing shoes for $42.98 per pair in variable raw material costs and $25.40 per pair in variable labor expense. The shoes sell for $134 per pair. Last year, production was 150,000 pairs. Fixed costs were $1,105,000. a. What were total production costs? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the marginal cost per pair? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the average cost per pair? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. If the company is considering a one-time order for an extra 6,000 pairs, what is the minimum acceptable total revenue from the order? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) a. Total production cost b. Marginal cost per pair c. Average cost per pair d. Minimum total revenue

Ojo Outerwear Corporation can manufacture mountain climbing shoes for $42.98 per pair in variable raw material costs and $25.40 per pair in variable labor expense. The shoes sell for $134 per pair. Last year, production was 150,000 pairs. Fixed costs were $1,105,000. a. What were total production costs? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the marginal cost per pair? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the average cost per pair? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. If the company is considering a one-time order for an extra 6,000 pairs, what is the minimum acceptable total revenue from the order? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) a. Total production cost b. Marginal cost per pair c. Average cost per pair d. Minimum total revenue

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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K-Too Everwear Corporation can manufacture mountain climbing shoes for $11 per pair in variable raw material costs and $13.34 per pair in variable labor expense. The shoes sell for $126 per pair. Last year, production was 180,000 pairs. Fixed costs were $780,000. a. What were total production costs? b. What is the marginal cost per pair? c. What is the average cost? d. If the company is considering a one-time order for an extra 13, 000 pairs, what is the minimum acceptable total revenue from the order?
Mountain Goat Inc. produces mountain climbing gear. The company can manufacture mountain climbing shoes for $14.9 per pair in raw material costs and $11.81 per pair in labor expense. The shoes sell for $114 per pair. Last year, production was 160,000 pairs, and the fixed costs of producing the shoes were $770,000. Required: (a)What were total production costs? (Do not round your intermediate calculations.) |(Click to select) (b)What is the marginal cost per pair? (Do not round your intermediate calculations.) |(Click to select) (c)What is the average cost per pair? (Do not round your intermediate calculations.) (Click to select) ♥ (d)The company is considering a one-time order for an extra 14,000 pairs. What is the minimum total revenue the firm should accept for producing these extra shoes? (Do not round your intermediate calculations.) |(Click to select)
Night Shades Inc. (NSI) manufactures biotech sunglasses. The variable materials cost is $1.89 per unit, and the variable labor cost is $3.4 per unit. a. What is the variable cost per unit? b. Suppose the company incurs fixed costs of $790,000 during a year in which total production is 355,500 units. What are the total costs for the year? c. If the selling price is $10.2 per unit, what is the NSI break-even on a cash basis?
Suppose that Head-First Company now sells both bicycle helmets and motorcycle helmets. The bicycle helmets are priced at $77 and have variable costs of $47 each. The motorcycle helmets are priced at $220 and have variable costs of $145 each. Total fixed cost for Head-First as a whole equals $57,000 (includes all fixed factory overhead and fixed selling and administrative expense). Next year, Head-First expects to sell 4,850 bicycle helmets and 1,940 motorcycle helmets. Required: 1. Form a package of bicycle and motorcycle helmets based on the sales mix expected for the coming year. 2. Calculate the break-even point in units for bicycle helmets and for motorcycle helmets. 3. Check your answer by preparing a contribution margin income statement.
Night Shades Inc. (NSI) manufactures biotech sunglasses. The variable materials cost is $16.00 per unit, and the variable labor cost is $7.30 per unit. a. What is the variable cost per unit? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Suppose the company incurs fixed costs of $860,000 during a year in which total production is 380,000 units. What are the total costs for the year? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c. If the selling price is $49.50 per unit, what is the cash break-even point? If depreciation is $660,000 per year, what is the accounting break-even point? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Night Shades, Incorporated, manufactures biotech sunglasses. The variable materials cost is $12.14 per unit, and the variable labor cost is $6.89 per unit. a. What is the variable cost per unit? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Suppose the company incurs fixed costs of $845,000 during a year in which total production is 210,000 units. What are the total costs for the year? (Do not round intermediate calculations.) c. If the selling price is $49.99 per unit, does the company break even on a cash basis? If depreciation is $450,000 per year, what is the accounting break-even point? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a. Variable cost b. Total cost units c. Cash break-even point units c. Accounting break-even point
Bridgeport Racers makes bicycles. It has always purchased its bicycle tires from the Cullumber Tires at $26 each but is currently considering making the tires in its own factory. The estimated costs per unit of making the tires are as follows: Direct materials $9 Direct labor $5 Variable manufacturing overhead $8 The company’s fixed expenses would increase by $73,000 per year if managers decided to make the tire.(a1) Calculate total relevant cost to make or buy if the company needs 11,300 tires a year. Make Buy Total relevant cost $enter a dollar amount $enter a dollar amount (a2) Ignoring qualitative factors, if the company needs 11,300 tires a year, should it continue to purchase them from Balyo or begin to produce them internally? The company select an option should not continueshould continue to purchase the tires.
Auto Tires, Inc. sells tires to service stations for an average of $145 each. The variable costs of each tire is $85 and monthly fixed manufacturing costs total $45,000. Other monthly fixed costs of the company total $15,000. Required: 1. What is the break-even level in tires? 2. What is the margin of safety, assuming sales total $190,000? 3. What is the break-even level in tires, assuming variable costs increase by 20 percent and selling price increase by 17 per unit ? 4. What is the break-even level in tires, assuming the selling price goes up by 20 percent, fixed manufacturing costs decline by 10 percent and other fixed costs decline by $1500and variable cost decrease by 1 per unit ?
Elroy Racers makes bicycles. It has always purchased its bicycle tires from the M. Wilson Tires at $25 each but is currently considering making the tires in its own factory. The estimated costs per unit of making the tires are as follows: Direct materials $8 Direct labor $5 Variable manufacturing overhead $7 The company’s fixed expenses would increase by $60,000 per year if managers decided to make the tire.(b)What qualitative factors should Elroy Racers consider in making this decision?
Sharp Company makes and sells pencil sharpeners. The variable cost of each sharpener is $20. The sharpeners are sold for $30 each. Fixed operating expenses amount to $40,000. a. Determine the break-even point in units and sales dollars. b-1. Determine the sales volume in units and dollars that is required to attain a profit of $12,000. b-2. Prepare an income statement using the contribution margin format to verify your answer. c. Determine the margin of safety between sales required to attain a profit of $12,000 and break-even sales.
Windows is a small company that installs windows. Its cost structure is as follows: LOADING... (Click the icon to view the cost structure.) Traylor Windows' breakeven revenues is $1,870,000 and breakeven units is 3,400. Calculate the margin of safety in units and dollars and the margin of safety percentage if Traylor Windows expects to sell 3,600 windows in the year. Begin with calculating the margin of safety in dollars. Determine the formula to calculate the margin of safety in dollars. Then, enter the amounts and calculate the margin of safety in dollars. Budgeted revenue - Breakeven revenue = Margin of safety in dollars - = Next, determine the formula, enter the amounts, and calculate the margin of safety in units. Budgeted units - Breakeven units = Margin of safety in units - = Finally, calculate the margin of safety percentage if…
Parker Pottery produces a line of vases and a line of ceramic figurines. Each line uses the sameequipment and labor; hence, there are no traceable fixed costs. Common fixed cost equals$30,000. Parker’s accountant has begun to assess the profitability of the two lines and has gathered the following data for last year: Required:1. Compute the number of vases and the number of figurines that must be sold for thecompany to break even.2. Parker Pottery is considering upgrading its factory to improve the quality of its products.The upgrade will add $5,260 per year to total fixed cost. If the upgrade is successful, theprojected sales of vases will be 1,500, and figurine sales will increase to 1,000 units. Whatis the new break-even point in units for each of the products?

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