Homework Answers
Question 2. False
If revenue decreases, management should reduce its expenses. Converting variable cost into fixed cost has no relevance in such case.
Question 3 . Break even point stays the same -
Break even point is computed by dividing fixed cost from contribution per unit (i.e revenue - variable cost). Since revenue & variable cost both decrease with the same amount, contribution remains same and also Break Even Point remains same.
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QUESTION 2 If a company expects revenues to decline, management should attempt to convert its variable...
$170 per unit. The company incurs variable manufacturing costs of $83 per unit. Variable selling expenses...
$170 per unit. The company incurs variable manufacturing costs of $83 per unit. Variable selling expenses are $19 per unit, annual fixed manufacturing costs are $498.000, and fixed selling and administrative costs are $236.400 per year. Required Determine the break-even point in units and dollars using each of the following approaches: a. Use the equation method. b. Use the contribution margin per unit approach. c. Prepare a contribution margin income statement for the break-even sales volume. Complete this question by...
Ritchie Manufacturing Company makes a product that it sells for $160 per unit. The company incurs variable manufacturin...
Ritchie Manufacturing Company makes a product that it sells for $160 per unit. The company incurs variable manufacturing costs of $73 per unit. Variable selling expenses are $15 per unit, annual fixed manufacturing costs are $490,000, and fixed selling and administrative costs are $258,800 per year. Required Determine the break-even point in units and dollars using each of the following approaches: a. Use the equation method. b. Use the contribution margin per unit approach c. Prepare a contribution margin income...
Eaton Tool Company has fixed costs of $464,600, sells its units for $98, and has variable...
Eaton Tool Company has fixed costs of $464,600, sells its units for $98, and has variable costs of $52 per unit. a. Compute the break-even point. Break-even point units b. Ms. Eaton comes up with a new plan to cut fixed costs to $360,000. However, more labor will now be required, which will increase variable costs per unit to $55. The sales price will remain at $98. What is the new break-even point? (Round your answer to the nearest whole...
QUESTION 9 Boomerang company sells a product at $100 per unit that has unit variable costs...
QUESTION 9 Boomerang company sells a product at $100 per unit that has unit variable costs of $30. The company's break-even sales point in sales dollars is $150,000. How much profit will the company make if it sells 4,000 units? A. $120,000 B. $70,000 C.$175,000 D. $215,000 QUESTION 10 To find the break-even point for a company that sells several products, the analyst must make an assumption about what the sales mix will be and calculate a weighted average contribution...
Question 15: Cooper Company sells a product at $50 per unit that has unit variable costs...
Question 15: Cooper Company sells a product at $50 per unit that has unit variable costs of $20. The company's break-even sales point in sales dollars is $150,000. How much is the fixed costs now? (Hint: The fixed costs is same as the total contribution margin when there is break-even.) Select one: O a. $120,000 O b. $100,000 O c. $200,000 O d. $90,000 ge Next page
When the variable cost per unit (v) increases but the fixed cost (FC) and the revenue...
When the variable cost per unit (v) increases but the fixed cost (FC) and the revenue per unit (r) remain constant, then: Question 17 options: The break-even point moves to the left. The break-even point stays in the same place. The break-even quantity increases. The break-even quantity decreases.
Rooney Company produces a product that sells for $40 per unit and has a variable cost...
Rooney Company produces a product that sells for $40 per unit and has a variable cost of $21 per unit. Rooney incurs annual fixed costs of $127.300 Required o. Determine the sales volume in units and dollars required to break even. (Do not round intermediate calculations.) b. Calculate the break-even point assuming fixed costs increase to $161,500. (Do not round intermediate calculations.) 40 a Sales volume in units Sales in dollars b Break-even units Break even sales
Gilitch Company has variable costs of $600,000. They are planning to sell 200,000 pairs of mittens...
Gilitch Company has variable costs of $600,000. They are planning to sell 200,000 pairs of mittens for $4 a pair. If Ilitch breaks even at this level of sales what are the fixed costs? Zark and Sons Ltd. makes travel bags that dissolve in water and has variable costs of $42 per unit and expects fixed costs to total $320,000. The travel bags sell for $56 each. Calculate: The Break Even Point in Dollars The Margin of Safety and Margin...
Presto Company makes radios that sell for $28 each. For the coming year, management expects fixed...
Presto Company makes radios that sell for $28 each. For the
coming year, management expects fixed costs to total $278,880 and
variable costs to be $16.80 per unit.
(a) Compute the break-even point in dollars using
the contribution margin (CM) ratio.
Break-even point
$
(b) Compute the margin of safety ratio assuming
actual sales are $944,715. (Round margin of safety
ratio to 2 decimal places, e.g. 10.50%.)
Margin of safety
%
(c) Compute the sales dollars required to earn net...
Blanchard Company manufactures a single product that sells for $160 per unit and whose total variable...
Blanchard Company manufactures a single product that sells for $160 per unit and whose total variable costs are $120 per unit. The company's annual fixed costs are $596,000. (1) Prepare a contribution margin income statement for Blanchard Company showing sales, variable costs, and fixed costs at the break- even point. (2) Assume the company's fixed costs increase by $134,000. What amount of sales (in dollars) is needed to break even? Complete this question by entering your answers in the tabs...
$170 per unit. The company incurs variable manufacturing costs of $83 per unit. Variable selling expenses are $19 per unit, annual fixed manufacturing costs are $498.000, and fixed selling and administrative costs are $236.400 per year. Required Determine the break-even point in units and dollars using each of the following approaches: a. Use the equation method. b. Use the contribution margin per unit approach. c. Prepare a contribution margin income statement for the break-even sales volume. Complete this question by...
Ritchie Manufacturing Company makes a product that it sells for $160 per unit. The company incurs variable manufacturing costs of $73 per unit. Variable selling expenses are $15 per unit, annual fixed manufacturing costs are $490,000, and fixed selling and administrative costs are $258,800 per year. Required Determine the break-even point in units and dollars using each of the following approaches: a. Use the equation method. b. Use the contribution margin per unit approach c. Prepare a contribution margin income...
Eaton Tool Company has fixed costs of $464,600, sells its units for $98, and has variable costs of $52 per unit. a. Compute the break-even point. Break-even point units b. Ms. Eaton comes up with a new plan to cut fixed costs to $360,000. However, more labor will now be required, which will increase variable costs per unit to $55. The sales price will remain at $98. What is the new break-even point? (Round your answer to the nearest whole...
QUESTION 9 Boomerang company sells a product at $100 per unit that has unit variable costs of $30. The company's break-even sales point in sales dollars is $150,000. How much profit will the company make if it sells 4,000 units? A. $120,000 B. $70,000 C.$175,000 D. $215,000 QUESTION 10 To find the break-even point for a company that sells several products, the analyst must make an assumption about what the sales mix will be and calculate a weighted average contribution...
Question 15: Cooper Company sells a product at $50 per unit that has unit variable costs of $20. The company's break-even sales point in sales dollars is $150,000. How much is the fixed costs now? (Hint: The fixed costs is same as the total contribution margin when there is break-even.) Select one: O a. $120,000 O b. $100,000 O c. $200,000 O d. $90,000 ge Next page
Rooney Company produces a product that sells for $40 per unit and has a variable cost of $21 per unit. Rooney incurs annual fixed costs of $127.300 Required o. Determine the sales volume in units and dollars required to break even. (Do not round intermediate calculations.) b. Calculate the break-even point assuming fixed costs increase to $161,500. (Do not round intermediate calculations.) 40 a Sales volume in units Sales in dollars b Break-even units Break even sales
Presto Company makes radios that sell for $28 each. For the
coming year, management expects fixed costs to total $278,880 and
variable costs to be $16.80 per unit.
(a) Compute the break-even point in dollars using
the contribution margin (CM) ratio.
Break-even point
$
(b) Compute the margin of safety ratio assuming
actual sales are $944,715. (Round margin of safety
ratio to 2 decimal places, e.g. 10.50%.)
Margin of safety
%
(c) Compute the sales dollars required to earn net...
Blanchard Company manufactures a single product that sells for $160 per unit and whose total variable costs are $120 per unit. The company's annual fixed costs are $596,000. (1) Prepare a contribution margin income statement for Blanchard Company showing sales, variable costs, and fixed costs at the break- even point. (2) Assume the company's fixed costs increase by $134,000. What amount of sales (in dollars) is needed to break even? Complete this question by entering your answers in the tabs...
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