Question

A product sells for $5 per unit.  The variable cost of production is $3 per unit.  Total fixed...

A product sells for $5 per unit.  The variable cost of production is $3 per unit.  Total fixed costs per year are $1000, including depreciation expense of $200. What is the cash flow breakeven point in units and in dollars?

A.

333 units and $1665.

B.

500 units and $2500.

C.

400 units and $2000.

D.

267 units and $1333.

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Less Sales Variable Costs Contribution Margin 5.00 3.00 2.00 $ Cash Fixed costs Fixed Costs-Depreciation 1000-200 800.00 Cash

Add a comment
Know the answer?
Add Answer to:
A product sells for $5 per unit.  The variable cost of production is $3 per unit.  Total fixed...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • MFG Manufacturing sells a product for $40 per unit. The production cost of the product is...

    MFG Manufacturing sells a product for $40 per unit. The production cost of the product is $21 per unit: direct materials of $8, direct labor of $7, variable overhead of $4 and fixed overhead of $2. The fixed overhead per unit comes from dividing $500,000 of fixed factory overhead by 250,000 units produced. In addition, MFG pays $3 for shipping each unit sold. Finally, MFG has fixed costs outside the factory (such as office building depreciation and salaries) that total...

  • EWL Corporation sells its product for $130 per unit. Its total cost function is TC =...

    EWL Corporation sells its product for $130 per unit. Its total cost function is TC = $15,000+ $800. EWL's production capacity is 500 units per month. It normally operates at 80% of capacity. Match the lettered items on the right with the appropriate item on the left. Each numbered item has only one correct answer. Each lettered item may be used once, more than once, or not at all. 1. Actual unit activity minus A. Margin of safety Breakeven point...

  • Marginal Cost (dollars) Marginal Physical Total Total Product of Variable Fixed Variable Input Fixed Input Input...

    Marginal Cost (dollars) Marginal Physical Total Total Product of Variable Fixed Variable Input Fixed Input Input Variable Cost Cost Output (units) (units) (units) (units) (dollars) (dollars) $500 $0 $500 $200 $500 $400 $500 $600 $500 $800 $500 $1000 Refer to Exhibit 21-3. The average variable cost of producing 45 units of output is a. S2.44 (E) b. S1.60. c. $2.00. d. S1.33. e. $13.33.

  • Fowler Company produces a product that sells for $200 per unit and has a variable cost...

    Fowler Company produces a product that sells for $200 per unit and has a variable cost of $125 per unit. Fowler incurs annual fixed costs of $450,000 Required a. 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 $600,000. (Do not round intermediate calculations.) Answer is not complete. 6,000 $ 1,200,000 Sales volume in units Sales in dollars Break-even units Break-even sales...

  • Hardy Co. manufactures a product that sells for $12 per unit. Total fixed costs are $96,000...

    Hardy Co. manufactures a product that sells for $12 per unit. Total fixed costs are $96,000 and variable costs are $7 per unit. Hardy can buy a newer production machine that will increase total fixed costs by $22,800 but variable costs will be decreased by $0.40 per unit. Answer the following (3 points each). A. Current break-even point in units B. New break-even point in units 5. Difference in break-even points in dollars

  • Problem 11-4 NYM Manufacturing Company makes a product. Selling Price per unit Variable manufacturing cost per unit Variable selling expense per unit (sales commissions) Annual Fixed Manufacturing Co...

    Problem 11-4 NYM Manufacturing Company makes a product. Selling Price per unit Variable manufacturing cost per unit Variable selling expense per unit (sales commissions) Annual Fixed Manufacturing Costs Annual Fixed Selling and Admin Costs 150 80 25 40,000 s 60,000 REQUIRED Determine the break-even point in units and dollars using the following approaches. 1 Equation method 2 Contribution margin per unit. 3 Contribution margin ratio. 4 Confirm your results by preparing a contribution margin income statement for the breakeven sales...

  • Scott Confectionery sells its Stack-o-Choc candy bar for $0.80. The variable cost per unit for the...

    Scott Confectionery sells its Stack-o-Choc candy bar for $0.80. The variable cost per unit for the candy bar is $0.20; total fixed costs are $150,000. An increase in chocolate prices causes the variable cost per unit to increase to $0.55. Calculate the breakeven point in units? (Round answer to 0 decimal places, e.g. 5,275.) Breakeven point in units bars Using the above breakeven point in units, calculate breakeven sales in dollars. (Round answer to 0 decimal places, e.g. 5,275.) Breakeven...

  • A company's product sells at $12 per unit and has a $5 per unit variable cost....

    A company's product sells at $12 per unit and has a $5 per unit variable cost. The company's total fixed costs are $98,000. The break-even point in units is: 1) 5,158.

  • Question 8 5 pts A company sells a product for $1,250 each, variable cost per unit...

    Question 8 5 pts A company sells a product for $1,250 each, variable cost per unit is $750, and total fixed cost are $700,000. Based on the provided information, answer the following: 1. What is the contribution margin in per unit? $ 2. Compute break even in units. units 3. Calculate sales in units and dollars in order to earn pre-tax income of $350,000. 1. Sales in Units: units 2. Sales in dollars: $ 4. Compute break even in units,...

  • 2. The Poncho Company sells ponchos at $60 each. The variable cost per unit is 50%...

    2. The Poncho Company sells ponchos at $60 each. The variable cost per unit is 50% of the sales price and the total fixed costs are $300,000. During the summer, the Poncho Company renovated its factory. As a result, its total fixed costs increased by another $96,000 and variable costs decreased to 40% of the sales price. Determine the breakeven point in units and dollars before and after the renovation, using the contribution margin technique. Units Dollars Breakeven before modernization:...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT