Widget Co. produces widgets for customers. The company has provided the following financial information for the past year. Each scenario below is separate. Product Selling price per unit Sales Quantity Variable cost per unit Fixed costs Widgets $9.00 528,000 $2.00 $67,000 Do not enter dollar signs or commas in the input boxes. Round breakeven units up to the nearest whole number. Round breakeven sales to the nearest whole number. a) Calculate break-even units and break-even sales. Breakeven units = Breakeven sales = $ b) Suppose the company would like to generate an operating profit of $5,000. Determine the revenue that is needed to obtain this target, and calculate the number of units that need to be produced to meet this goal. Breakeven units = Breakeven sales = $ c) Suppose the company decides to lower the selling price from $9.00 per unit to $8.00 per unit. Calculate break-even units and break- even sales. Breakeven units = Breakeven sales = $ d) Suppose that fixed costs drop to $52,000 from $67,000. Calculate break-even units and break-even sales. Breakeven units = Breakevén sales = $
Widget Co. produces widgets for customers. The company has provided the following financial information for the past year. Each scenario below is separate. Product Selling price per unit Sales Quantity Variable cost per unit Fixed costs Widgets $9.00 528,000 $2.00 $67,000 Do not enter dollar signs or commas in the input boxes. Round breakeven units up to the nearest whole number. Round breakeven sales to the nearest whole number. a) Calculate break-even units and break-even sales. Breakeven units = Breakeven sales = $ b) Suppose the company would like to generate an operating profit of $5,000. Determine the revenue that is needed to obtain this target, and calculate the number of units that need to be produced to meet this goal. Breakeven units = Breakeven sales = $ c) Suppose the company decides to lower the selling price from $9.00 per unit to $8.00 per unit. Calculate break-even units and break- even sales. Breakeven units = Breakeven sales = $ d) Suppose that fixed costs drop to $52,000 from $67,000. Calculate break-even units and break-even sales. Breakeven units = Breakevén sales = $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Step 1: Basic Introduction
VIEWStep 2: a Calculation of Breakeven units and Breakeven sales
VIEWStep 3: b Calculation of Sales needed to earn operating profit of 5000
VIEWStep 4: c. Calculation of Breakeven units and Sales if Selling price per unit is 8
VIEWStep 5: d. Calculation of Breakeven units and breakeven sales if Fixed Cost is 52000
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