You are selling a new line of T-shirts on the boardwalk. The selling price will be $25 per shirt The labor cost is $5 per shirt. Additionally, the cost of materials will be $10per shirt. The administrative costs of operating the company are estimated to be $60,000 annually, and the sales and marketing expenses are $20,000 a year.What is the break-even in units and BEP in dollars?Formulas:Contribution Margin = Unit Selling Price-Unit Variable CostProfit - Total Revenue - Total CostorProfit - Quantity Sold (Selling Price per unit - Variable Cost per unit) - Fixed CostFixed CostBreak-even (quantity) =Unit Selling Price - Unit Variable CostBreak-even ($) = Break-even (quantity). X Quantity SoldFixed Cost + Profit DesiredUnit Selling Price - Unit Variable CostTarget Quantity for certain profit =

Break even point in units = Fixed costs / contribution margin per unit Break even point in sales…

You are selling a new line of T-shirts on the boardwalk. The selling price will be $25 per shirt. The labor cost is $5 per shirt. Additionally, the cost of materials will be $10 per shirt. The administrative costs of operating the company are estimated to be $60,000 annually, and the sales and marketing expenses are $20,000 a year. What is the break-even in units and BEP in dollars? Formulac

You are selling a new line of T-shirts on the boardwalk. The selling price will be $25 per shirt. The labor cost is $5 per shirt. Additionally, the cost of materials will be $10 per shirt. The administrative costs of operating the company are estimated to be $60,000 annually, and the sales and marketing expenses are $20,000 a year. What is the break-even in units and BEP in dollars? Formulac

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 20E

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Suppose that a company is spending 60,000 per year for inspecting, 30,000 for purchasing, and 40,000 for reworking products. A good estimate of nonvalue-added costs would be a. 70,000. b. 130,000. c. 40,000. d. 90,000. e. 100,000.
Plank, the new owner of the vehicle accessory shop, is considering buying sets of winter tyres for $ 299 per set and selling them at $ 520 each. Fixed costs related to this operation amount to $ 3250 per month. It is expected that 18 sets per month could be sold. How much profit will Plank make each month? Hint: use the contribution margin approach.
Planck, the new owner of the vehicle accessory shop, is considering buying sets of winter tyres for $ 299 per set and selling each set at $ 520. Fixed costs related to this operation amount to $ 3250 per month. It is expected that 18 sets per month could be sold. How much profit will Planck make each month? Round to the nearest one. Hint: use the contribution margin approach.
Required: 1. Complete the following table. 2. Suppose Sandy Bank sells its canoes for $590 each. Calculate the contribution margin per canoe and the contribution margin ratio. 3. This year Sandy Bank expects to sell 760 canoes for $590 each. Prepare a contribution margin income statement for the company. 4. Calculate Sandy Bank's break-even point in units and in sales dollars. Sandy Bank sells its canoes for $590 each. 5. Suppose Sandy Bank wants to earn $76,000 profit this year. Calculate the number of canoes that must be sold to achieve this target. Sandy Bank sells its canoes for $590 each. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the following table. Note: Round your "Cost per Unit" answers to 2 decimal places. Number of Canoes Produced and Sold Total costs Variable Costs Fixed Costs Total Costs Cost per Unit Required 3 Required 4 Variable Cost per Unit Fixed Cost per Unit Total Cost per Unit $ $ $ 500 Required 5 780 0 0.00
If the fixed cost becomes $1,250,000, due to the increase in rent and salaries, what would be the new break-even load factor? * JetX Is a company that produces hardware parts for airerafts. The company has an annual fixed cost of $1,000,000 the below table shows the company's costs, revemues, and profits at different levels of production. Please complete the below tabke, knowing that the varinble cost per unit of production is $250. Please use the table to answer the following six questions. Problem Fixed costs Total Total cost Total Profit (or los) Output (Hardware units per year) variable revenue cost $1,00,000 0 $1,000,000 0 -S1,000,000 10,000 15,000 $1,000,000 $4,500,000 20,000 25,000 30,000
Currently, Sweet Treats Bakery sells 1,200 cupcakes per month. The owners would like to increase net income above what is currently earned. Fixed costs are $1,500 per month and their contribution margin is $3 per cupcake. What would be a reasonable net income goal? O $1,800 O $2,600 O $2,100 O $5,600
The big shoe company are planning production for next year. The selling price is $30 per pair, raw materials cost $7.50 and labor $5.50 per pair. Fixed costs are $150,000. Planned production for next year is 12,500 pairs. Required a) Calculate the marginal cost per pair; the absorption cost per pair; the break even point and a break even graph in steps of 100 pairs. The profit or loss is 12,500 pairs are sold. b) Flashsale offers to buy 2,500 pairs of boots at $20 a pair. This is within capacity and fixed costs will stay the same. Please advise the management whether or not to accept the order. c) A manufacturer in Slaka has offered to make the boots for $20 a pair up to 10,000 pairs and $15 a pair above this level. Big shoe would stop production and act as distributers. Fixed costs would fall to $50,000 every year. Advise management of the financial consequences of accepting this offer d) What other issues apart from finance does the Big Shoes Company need to consider?
Jamie Quinn, a sole proprietor, has the following projected figures for next year: Selling price per unit $150.00 Contribution margin per unit $45.00 Total fixed costs $630,000 What is the break-even point in dollars? a.$2,100,000 b.$426,000 c.$189,000 d.$900,000
There are two competing alternatives in your textile business. A-type Tufting Machine costs $10,000 and B-Type Tufting Machine costs $35,000. A-type Tufting Machine can result in $11,000 labour savings in the first two years and $10,000 in year three. B-type Tufting Machine can result in $20,000 labour savings in the first two years. Assume MARR=8%. and find the difference between the net present worth of these two alternatives using infinite planning horizon with project repeatability. Question 2 options: a) Between $19,176 and $20,367 b) Between $17,176 and $18,367 c) Between $25,176 and $26,367 d) Between $29,176 and $30,367 e) Between $23,176 and $24,367 f) None of the answers are correct
There are two competing alternatives in your textile business. A-type Tufting Machine costs $10,000 and B-Type Tufting Machine costs $35,000. A-type Tufting Machine can result in $11,000 labour savings in the first two years and $10,000 in year three. B-type Tufting Machine can result in $20,000 labour savings in the first two years. Assume MARR=8%. and find the difference between the net present worth of these two alternatives using infinite planning horizon with project repeatability. a) None of the answers are correct O b) Between $19,176 and $20,367 c) Between $29,176 and $30,367 d) Between $17,176 and $18,367 e) Between $23,176 and $24,367 f) Between $25,176 and $26,367
The fixed costs within a machine shop are $3.4M annually. The main product this shop produces is priced at $15.00 per unit. Costs for material and labor are $6.50 per unit. What is the annual profit (or loss) if 300,000 units are sold?
Mackler, Inc. sells a product with a contribution margin of $50 per unit. Fixed costs are $8,000 per month. How many units must Mackler sell to break even? Please show the formula you used and show your work in the space provided.