Shalom Company manufactures Peace Products and sells it at P500 per unit. Variablemanufacturing costs to manufacture is P200 per unit, while it incurs P150 per unit to sell. Thefixed costs to manufacture and sell are P150,000 and P120,000, respectively. (1) How many unitsshould Shalom Company sell to break-even? (2) If the company targets to earn profit of P300,000,how many units should Company sell?

Answered: Image /qna-images/answer/00eb0223-6611-4e66-b9d4-63ba9fc23d04.jpg

Answered: Shalom Company manufactures Peace…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Ritz Furniture has a contribution margin ratio of 0.17. If fixed costs are $166,600, how many dollars of revenue must the company generate in orger to reach the break-even point?
What is the breakeven points in units? UrTurn sells its products at P80 per unit with the unit variable cost of P55. Its fixed cost is P81,000. How many units must be sold to achieve the following (tax rate is at 40%)
Diversity Ltd. produces and sells a product called Star. The company is currently selling 9,560 units of the product which represent £143,400. Total fixed costs equal £66,920 and total contribution equals £66,920. Required: a) Considering this information, is Diversity Ltd. selling a profitable amount of its product Star and which would be your advice for the company? Which is the price per unit at which Diversity Ltd. is selling its product? Explain your answer in detail. b) Consider that, after an increase in the market demand of product Star, Diversity Ltd. sells 25% more units of product Star. In this new situation, is Diversity Ltd. selling a profitable amount of its product Star? Explain your answer in detail. c) Draw a graph related to your previous answers in a) and b). Consider the information from the graph, which would be the financial situation of Diversity Ltd. if sales decrease in more than 25%?
Agta Enterprises manufactures a product that sells for R180 each. The company presently produces and sells 50 000 units per year. Unit variable manufacturing and selling expenses are R90 and R18 respectively. Annual fixed costs are R2 200 000 for manufacturing overheads and R1 040 000 for selling and administrative activities Suppose the marketing manager proposes that the selling price be increased to R198 per unit. Calculate the amount by which fixed costs must decrease in order to achieve the company’s profit objective of R1 800 000, if 50 000 units are sold.
A company produces wooden tables. The company has fixed costs of $1600, and it costs an additional $50 per table. The company sells the tables at a price of $157 per table. If the company needs to earn a profit of $7200, how much money in costs should it be prepared to cover? It should be prepared to cover Round to the nearest whole number.
Required:(a) GEM has an opportunity to sell 10 000 units to an overseas customer. Import duties and other special costs associated with this order would total $42 000. The only selling costs that would be associated with the order would be a shipping cost of $9.00 per unit. What would be the minimum acceptable unit price for GEM to consider this order? (hint: GEM would not accept the order if it would reduce the company’s profit) (b) The company has 200 units of Flicks on hand that were produced two months ago. Due to blemishes on the units, it will be impossible to sell these units at the normal price. If the company wishes to sell them through regular sales channels, what would be the relevant cost for setting the minimum price? Explain. (c) “All future costs are relevant in decision making.” Do you agree? Explain.
Green Co. incurses cost of $15 per pound to produce Product X, which it sells for $26 per pound. The company can further process Product X to produce Product Y. Product Y would sell for $30 per pound and would require an additional cost of $10 per pound to be produced. The differential cost of producing Product Y is _____.
Metalex Roofing Ltd manufactures roofing sheets whose normal selling price is GH¢20 per sheet. The variable cost of producing the product is GH¢8. A foreign distributor has offered to purchase 3,000 sheets for GH¢10 per sheet. This is a one-time order that would not affect the company's regular business. The annual capacity is 10,000 sheets, but Metalex is currently producing and selling only 5,000 sheets. Fixed costs are unaffected by the order. a. Should Metalex accept the offer? b. Assuming Metalex has no spare capacity and the order will result in a loss of production of 300 sheets. Should the order be accepted?
McPupper Steel has products that cost $10,500 to manufacture. The products can be sold as is for $13,000 or could be processed further for a cost of $2,100 and sold for $14,000. What would be the incremental profit or (loss) of processing the products further and selling them instead of selling them as is?
XYZ Corporation has calculated that it has fixed costs that consist of its lease, depreciation of its assets, executive salaries, and property taxes. Those fixed costs add up to RM 60,000. Their product is the widget. Their variable costs associated with producing the widget are raw material, factory labor, and sales commissions. Variable costs have been caleulated to be RM 0.80 per unit. The widget is priced at RM 2.00 each. (i) Determine the break-even point? Let's say you find a way to cut the cost of your overhead or fixed costs by reducing your own salary by RM10,000, calculate the new breakeven point. (ii) (iii) Market research has shown that customers will pay RM 3.00 for it, and your sales team is confident that they can sell at least 50,000 units per month. Determine whether the product is financially viable and calculate the profit the company makes according to the forecasting sales.
Diversity Ltd. produces and sells a product called Star. The company is currently selling 9,560 units of the product which represent £143,400. Total fixed costs equal £66,920 and total contribution equals £66,920. Required: Considering this information, is Diversity Ltd. selling a profitable amount of its product Star and which would be your advice for the company? Which is the price per unit at which Diversity Ltd. is selling its product? Explain your answer in detail. Consider that, after an increase in the market demand of product Star, Diversity Ltd. sells 25% more units of product Star. In this new situation, is Diversity Ltd. selling a profitable amount of its product Star? Explain your answer in detail. Draw a graph related to your previous answers in a) and b). Consider the information from the graph, which would be the financial situation of Diversity Ltd. if sales decrease in more than 25%?
Kitts Company buys and sells a product that has a variable cost per unit of $22. Kitts' fixed costs amount to $56,000. The product sells for $26 each. The Company is currently making and selling 20,000 units of product. If Kitts is able to increase sales by 4,000 units, the break-even point will Multiple Choice increase by $16,000. decrease by $16,000. not change. The answer cannot be determined with the information provided.

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS