Case 2: &n
Case 2:
Break-Even Analysis
Data Results
Unit Revenue $900 Total Revenue
Fixed Cost $50,000 Total Fixed Cost
Marginal Cost $400 Total Variable Cost
Postage per unit $10
Fax Machine cost $90
"New Sales" Forecast 300 Profit (Loss)
Confirmed future orders 100
Break-Even Point (Real break even)
Assignment 1 questions - solve each of the questions below as a separate functional model on this tab /worksheet
If you knew that a 40 % discount on the last 200 units would cause the new sales to increase to a total of 430, would you do it?
Homework Answers
Answer:
The increse or decrese in the capital costs for machinery
or real estate affect the break even point
PA6-1 Calculating Contribution Margin, Contribution Margin Ratio, Break-Even Point [LO 6-1, 6-2] Hermosa, Inc., produces one...
PA6-1 Calculating Contribution Margin, Contribution Margin Ratio, Break-Even Point [LO 6-1, 6-2] Hermosa, Inc., produces one model of mountain bike. Partial information for the company follows: 540 780 900 $ 135,000 $ ? $ ? Number of bikes produced and sold Total costs Variable costs Fixed costs per year Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit $ 538.75 Required: 1. Complete the table. (Round your "Cost per Unit" answers to...
MARGINAL COSTING EXERCISES (Original Fl file: 26 KT-perus.xls2) 1. Marginal cost statement Sales revenue less Variable...
MARGINAL COSTING EXERCISES (Original Fl file: 26 KT-perus.xls2) 1. Marginal cost statement Sales revenue less Variable costs = Contribution less Fixed costs Profit units 1.000 1,000 1,000 per unit 100 60 total € 100,000 € 60,000 € 40,000 30,000 € 10,000 € 40 Calculate the following: Contribution-% 40% 75,000 Break-even point in € B/E in unit Safety margin in € Safety margin-% 750 25,000 25% 2 2nd company's variable costs are and fixed monthly costs in euros are 70% of...
Copy resulting income statement in worksheet (2) into a new Microsoft Word document, and label the...
Copy resulting income statement in worksheet (2) into a new
Microsoft Word document, and label the income statement as
“Deliverable 1”. Deliverable 2: Now return to worksheet (1) and
reduce the price per unit of all bicycles by 25%. Copy the
resulting income statement in worksheet (2) into the same Microsoft
Word document, and label the income statement as “Deliverable
2”.
Activity #2 Goal: Produce an Excel spreadsheet that allows your
company to model the sales quantity required to break-even,...
Activity 13.3 - Price Calculation – Breakeven Pricing Often a firm will calculate the break-even point...
Activity 13.3 - Price Calculation – Breakeven Pricing Often a firm will calculate the break-even point for a price. That is, if we set the price at $X, then how many units will we need to sell to cover costs (that is, our break-even point). Work through the following two examples to gain a better understanding of this approach. Fixed Costs = $10,000 Variable Costs = $10 Using break-even analysis calculate: 1. How many units need to be sold to...
A) Further analysis of McCartney Manufacturing’s fixed costs revealed that the company actually faces annual fixed overh...
A) Further analysis of McCartney Manufacturing’s fixed costs revealed that the company actually faces annual fixed overhead costs of $9,800 and annual fixed selling and administrative costs of $4,200. Variable cost estimates are correct: direct materials cost, $2.40 per unit; direct labor costs, $3.00 per unit; and variable overhead costs, $0.60 per unit. At this time, the selling price of $20 will not change. Complete the following formulas for the revised fixed costs. Enter the ratio as a percentage. Contribution...
A) Further analysis of McCartney Manufacturing’s fixed costs revealed that the company actually faces annual fixed...
A) Further analysis of McCartney Manufacturing’s fixed costs revealed that the company actually faces annual fixed overhead costs of $9,800 and annual fixed selling and administrative costs of $4,200. Variable cost estimates are correct: direct materials cost, $2.40 per unit; direct labor costs, $3.00 per unit; and variable overhead costs, $0.60 per unit. At this time, the selling price of $20 will not change. Complete the following formulas for the revised fixed costs. Enter the ratio as a percentage. Contribution...
Question 2 &n...
Question 2 (Total: 40 marks) Tabulation Corporation manufactures and sells two types of electronic calculators: EL-520 W and EL-620 T. The following data was gathered from last month’s activities: EL-520 W EL-620 T Sales in units 5,000 3,000 Selling price per unit $50 $100 Variable production costs per unit $10 $26 Traceable fixed production costs $100,000 $150,000 Variable selling expenses per unit $5 $6 Traceable fixed selling expenses $5,000 $7,500 Allocated division administrative expenses $50,000 $60,000 Required: Prepare...
APPLY THE CONCEPTS: Use the CVP graph to analyze the effects of changes in price and...
APPLY THE CONCEPTS: Use the CVP graph to analyze the effects of changes in price and costs Graph the following on your own paper. At the original position, the break-even point in sales dollars is $24,000 at 500 units. The fixed costs are $8,000. Assume the slope of the sales line is equal to the selling price. When the two points of the sales line are at the origin and the break-even point, you see that the slope of the...
Fill in the blanks with increase, decrease, or remain the same to correctly complete each statement....
Fill in the blanks with increase, decrease, or remain the same to correctly complete each statement. (1) Contribution margin ratio will with an increase in sales volume. (2) Fixed cost per unit will with an increase in sales volume (within the relevant range). (3) A decrease in the contribution margin will cause the break-even point to (4) Variable cost per unit will with a decrease in sales volume. (5) An increase in fixed costs will cause the break-even point to...
2. Cutlass Company's projected profit for the coming year is as follows: Total Per Unit Sales...
2. Cutlass Company's projected profit for the coming year is as follows: Total Per Unit Sales $200,000 $20 Total variable cost 120,000 Contribution margin 80,000 8 Total fixed cost 64,000 Contribution margin $16,000 Required (40 marks): a. Compute the variable cost ratio. Compute the contribution margin ratio. b. Compute the break-even point in units. c. Compute the break-even point in sales dollars. d. How many units must be sold to earn a profit of $30,000? e. Using the contribution margin...
PA6-1 Calculating Contribution Margin, Contribution Margin Ratio, Break-Even Point [LO 6-1, 6-2] Hermosa, Inc., produces one model of mountain bike. Partial information for the company follows: 540 780 900 $ 135,000 $ ? $ ? Number of bikes produced and sold Total costs Variable costs Fixed costs per year Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit $ 538.75 Required: 1. Complete the table. (Round your "Cost per Unit" answers to...
MARGINAL COSTING EXERCISES (Original Fl file: 26 KT-perus.xls2) 1. Marginal cost statement Sales revenue less Variable costs = Contribution less Fixed costs Profit units 1.000 1,000 1,000 per unit 100 60 total € 100,000 € 60,000 € 40,000 30,000 € 10,000 € 40 Calculate the following: Contribution-% 40% 75,000 Break-even point in € B/E in unit Safety margin in € Safety margin-% 750 25,000 25% 2 2nd company's variable costs are and fixed monthly costs in euros are 70% of...
Copy resulting income statement in worksheet (2) into a new
Microsoft Word document, and label the income statement as
“Deliverable 1”. Deliverable 2: Now return to worksheet (1) and
reduce the price per unit of all bicycles by 25%. Copy the
resulting income statement in worksheet (2) into the same Microsoft
Word document, and label the income statement as “Deliverable
2”.
Activity #2 Goal: Produce an Excel spreadsheet that allows your
company to model the sales quantity required to break-even,...
Activity 13.3 - Price Calculation – Breakeven Pricing Often a firm will calculate the break-even point for a price. That is, if we set the price at $X, then how many units will we need to sell to cover costs (that is, our break-even point). Work through the following two examples to gain a better understanding of this approach. Fixed Costs = $10,000 Variable Costs = $10 Using break-even analysis calculate: 1. How many units need to be sold to...
Fill in the blanks with increase, decrease, or remain the same to correctly complete each statement. (1) Contribution margin ratio will with an increase in sales volume. (2) Fixed cost per unit will with an increase in sales volume (within the relevant range). (3) A decrease in the contribution margin will cause the break-even point to (4) Variable cost per unit will with a decrease in sales volume. (5) An increase in fixed costs will cause the break-even point to...
2. Cutlass Company's projected profit for the coming year is as follows: Total Per Unit Sales $200,000 $20 Total variable cost 120,000 Contribution margin 80,000 8 Total fixed cost 64,000 Contribution margin $16,000 Required (40 marks): a. Compute the variable cost ratio. Compute the contribution margin ratio. b. Compute the break-even point in units. c. Compute the break-even point in sales dollars. d. How many units must be sold to earn a profit of $30,000? e. Using the contribution margin...
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