When studying a project, the following variable costs were estimated for a normal production capacity of 140,000 units, with a maximum capacity of 200,000 units: Materials $120,000 Labor $300,000 Other $80,000 Fixed costs are estimated, according to the level of production, in: Production Fixed Cost 0 - 40,000 $320,000 40,001 - 130,000 $380,000 130,001 - 180,000 $420,000 180,001 - 200,000 $500,000 If the selling price of each unit is $15 and the expected production is 100,000 units per year, what is the minimum number of additional units that need to be sold at the price of $11 per unit to show a profit of $762,000 per year? To raise sales to 120,000 units per year, how much could be spent additionally in advertising (fixed cost) so that by maintaining a price of $15, a profit of 20% on sales?

When studying a project, the following variable costs were estimated for a normal production capacity of 140,000 units, with a maximum capacity of 200,000 units: Materials $120,000 Labor $300,000 Other $80,000 Fixed costs are estimated, according to the level of production, in: Production Fixed Cost 0 - 40,000 $320,000 40,001 - 130,000 $380,000 130,001 - 180,000 $420,000 180,001 - 200,000 $500,000 If the selling price of each unit is $15 and the expected production is 100,000 units per year, what is the minimum number of additional units that need to be sold at the price of $11 per unit to show a profit of $762,000 per year? To raise sales to 120,000 units per year, how much could be spent additionally in advertising (fixed cost) so that by maintaining a price of $15, a profit of 20% on sales?

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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