Foundations of Financial Management
16th Edition
ISBN: 9781259277160
Author: Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Publisher: McGraw-Hill Education
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Question
Chapter 5, Problem 1P
a.
Summary Introduction
To calculate: The value of BEP (in units) of Shock Electronics.
Introduction:
Break-even point (BEP):
BEP is a no-
b.
Summary Introduction
To prepare: The table to illustrate BEP.
Introduction:
Break-even point (BEP):
BEP is a no-profit and no loss situation. It is a point in production at which the expenditure in totality is equal to the income in totality.
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Students have asked these similar questions
Madlock, Inc. sells a product with a contribution margin of $10 per unit. Fixed costs are $1,800 per month. How many units must Madlock sell to break even?
Begin by showing the formula and then entering the amounts to calculate the units Madlock must sell to break even. (Abbreviation used: CM = contribution margin. Complete all input
fields. Enter a "0" for items with a zero value.)
Target profit ) =
Fixed costs ▼
+
+
HH
CM per unit
TOD
Carmen
Required sales in units
Shock Electronics sells portable heaters for #35 per unit, and the variable cost to produce them is $22. Mr. Amps estimates that the fixed costs are $97,500.
a) Compute the break even point in units BE = FC/ P-VC per unit
b) Fill in the following table (in dollars) to illustrate that the break-even point has been achieved
Sales....... _______________
- Fixed Costs (FC) _______________
-Total Variable Costs (VC) _______________
Net Profit (loss) ________________
Shock Electronics sells portable heaters for $49 per unit, and the variable cost to produce them is $29. Ms. Amps estimates that the
fixed costs are $100,800.
a. Compute the break-even point in units.
Break-even point
b. Fill in the following table (in dollars) to illustrate that the break-even point has been achieved.
Sales
Fixed costs
Total variable costs
Net profit (loss)
units
$
0
Chapter 5 Solutions
Foundations of Financial Management
Ch. 5 - Discuss the various uses for break-even analysis....Ch. 5 - What factors would cause a difference in the use...Ch. 5 - Explain how the break-even point and operating...Ch. 5 - Prob. 4DQCh. 5 - What does risk taking have to do with the use of...Ch. 5 - Discuss the limitations of financial leverage....Ch. 5 - Prob. 7DQCh. 5 - Explain how combined leverage brings together...Ch. 5 - Explain why operating leverage decreases as a...Ch. 5 - Prob. 10DQ
Ch. 5 - Prob. 1PCh. 5 - Prob. 2PCh. 5 - Prob. 3PCh. 5 - Draw two break-even graphs-one for a conservative...Ch. 5 - Prob. 5PCh. 5 - Shawn Pen & Pencil Sets Inc. has fixed costs of ....Ch. 5 - Calloway Cab Company determines its break-even...Ch. 5 - Prob. 8PCh. 5 - Boise Timber Co. computes its break-even point...Ch. 5 - The Sterling Tire Company’s income statement for...Ch. 5 - Prob. 11PCh. 5 - Healthy Foods Inc. sells 50-pound bags of grapes...Ch. 5 - United Snack Company sells 50-pound bags of...Ch. 5 - Prob. 14PCh. 5 - Prob. 15PCh. 5 - Lenow’s Drug Stores and Hall’s Pharmaceuticals...Ch. 5 - The capital structure for Cain Supplies is...Ch. 5 - Sterling Optical and Royal Optical both make glass...Ch. 5 - Prob. 19PCh. 5 - Sinclair Manufacturing and Boswell Brothers Inc....Ch. 5 - DeSoto Tools Inc. is planning to expand...Ch. 5 - Prob. 23PCh. 5 - Prob. 24PCh. 5 - Prob. 25PCh. 5 - Mr. Gold is in the widget business. He currently...Ch. 5 - Delsing Canning Company is considering an...Ch. 5 - Prob. 2WECh. 5 - Prob. 3WECh. 5 - Prob. 4WECh. 5 - Prob. 5WE
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