Question

8 Alvarez Company's break-even point in units is 1.550. The sales price per unit is $16 and variable cost per unit is $12. If the company sells 3,600 units, what will net income be? 0:40:24 Multiple Choice $82,400 ook $14.400 $8,200 $3,000 $43,400

Answer 1

First Question
BEP	=	Total Fixed cost
		Contribution per unit
1550	=	Total Fixed cost
		16 less 12
Total Cost Cost	=	6200
Net Income	=	Contibution Less Fixed Cost
	=	3600*4 Less 6200
	=	8200
2nd Question
BEP	=	Total Fixed cost
		Contribution per unit
	=	180000
		15.30 less 9.1
	=	29032
3rd Question
This is sunk cost. Because it has already been occurred, it has nothing to do with current decision
4th question
		16000 Units	29000 units	Comment
Sales		76800	139200	Sales price per unit is 76800 divided by 16000 i.e 4.8
Less Variable cost		16000	29000	Variable Cost per unit is 16000 divided by 16000 i.e 1
Less Fixed Costs		29000	29000	Fixed cost is fixed hence it will be same at all levels.
Operating Income		31800	81200
		Hence Anwer is 81200
5th Question
		Activity Type	Comment if any
	1	Investing Activities	-
	2	Investing Activities	-
	3	Investing Activities	-
	4	Financing Activities	-
	5	Financing Activities	-
	6	Financing Activities	-
	7	Operating Activities	-
	8	Operating Activities	-
	9	Investing Activities	Dividend Received is investing activity, since it is occurred as of result of investments.
	10	Operating Activities	-