Reference no: EM13846570
1. A product sells for $83 per unit, and its variable costs per unit are $71. The fixed costs are $10,479. If the firm wants to earn $31,327 pretax income, how many units must be sold? Answer to nearest whole dollar without any commas or decimal points eg. 1000 not 1,000.00 Enter a negative number as -10 not (10).
2. The Rally Company manufactures and sells toy cars. Each car sells for $40.21 and the variable cost per unit is $13.78. Rally's total fixed costs are $20,000 and budgeted sales are 2,610. What is the budgeted contribution margin (note: not the per unit contribution margin)? Answer to nearest whole dollar without any commas or decimal points eg. 1000 not 1,000.00 Enter a negative number as -10 not (10).
3. Noble Company's contribution margin ratio is 27%. Total fixed costs are $14,597. What is Noble's break-even point in sales dollars? Answer to nearest whole dollar without any commas or decimal points eg. 1000 not 1,000.00 Enter a negative number as -10 not (10).
4. A product sells for $235 per unit, and its variable costs per unit are $75. The fixed costs are $8,524. What is the break-even point in dollar sales? Answer to nearest whole dollar without any commas or decimal points eg. 1000 not 1,000.00 Enter a negative number as -10 not (10).
5. A prodct sells for $80 per unit and has variable costs of $35 per unit. The fixed costs are $69,918. If the variable costs per unit were to decrease by $6 per unit and fixed costs increase to $103,763, and the selling price does not change, break-even point in units would be: Answer to nearest whole dollar without any commas or decimal points eg. 1000 not 1,000.00 Enter a negative number as -10 not (10).
6. Petoski Corp. manufactures compact sleds that sell for $79. Fixed costs are $56,326 and variable costs are $38 per unit. Petocki can buy a newer production machine that will increase fixed costs by $11,015 per year, but will decrease variable costs by $5.1 per unit. What effect would the purchase of the new machine have on Petoski's break-even point in units? Answer to nearest whole dollar without any commas or decimal points eg. 1000 not 1,000.00 Enter a negative number as -10 not (10). Indicate an increase as a positive number and a decrease as negative.
7. In Davis Corporation's most recent fiscal year, the company reported pretax earnings of $109,695. Fixed costs totaled $45,898, the unit selling price of the firm's only product was $57, and the variable costs per unit were 35% of the selling price. Based on this information, the firm's break-even point in units was: Answer to nearest whole dollar without any commas or decimal points eg. 1000 not 1,000.00 Enter a negative number as -10 not (10).
8. A firm sells two products, A and B. For every unit of A the firm sells, 3 units of B are sold. The firm's total fixed costs are $1,612,000. Selling prices and cost information for both products follow:Product A - selling price 27 variable cost 11
Product B - selling price 41 variable cost 29
What is the contribution margin per composite unit? Answer to nearest whole dollar without any commas or decimal points eg. 1000 not 1,000.00 Enter a negative number as -10 not (10).
9. A firm sells two products, A and B. For every unit of A the firm sells, 3 units of B are sold. The firm's total fixed costs are $162,391. Selling prices and cost information for both products follow:Product A - selling price 24 variable cost 13
Product B - selling price 65 variable cost 53
What is the firm's break-even point in composite units? Answer to nearest whole dollar without any commas or decimal points eg. 1000 not 1,000.00 Enter a negative number as -10 not (10).
10. A firm sells two products, A and B. For every unit of A the firm sells, 3 units of B are sold. The firm's total fixed costs are $141,111. Selling prices and cost information for both products follow:Product A - selling price 26 variable cost 6
Product B - selling price 44 variable cost 21
What is the firm's break-even point in units of B? Answer to nearest whole dollar without any commas or decimal points eg. 1000 not 1,000.00 Enter a negative number as -10 not (10).
Note:
1.) breakeven in units = (fixed cost + desired profit) / contribution margin
3.) fixed cost / contribution margin ratio
4.) Contribution margin ratio = (price per unit - variable cost per unit) / price per unit?Break-even point in sales dollars = total fixed cost / cm ratio
5.) new fixed cost / new contribution margin per unit = new breakeven sale in units
6.) new breakeven - old breakeven = increase/decrease in units needed to sell to breakeven.
New machinery often increases the required breakeven.
New breakeven = (fixed costs + increase in fixed costs) / (price - new variable cost)
7.) fixed cost / contribution margin = breakeven units
contribution margin = selling price - varible costs
8.) If 2 units of B are sold for every one unit of A the contribution margin per composite unitwould be calculated as: contribution margin for product A + (2 x contribution margin for product B)
Note: If there are 3 units of B for 1 of A the formula would be: cont margin product A + (3 x cont margin for B)
9.) If 2 units of B are sold for every 1 unit of A the firm's break-even point in composite unitswould be calculated as: fixed cost / (contribution margin for product A + 2 x contribution margin for product B)
Note: If there are 3 units of B for 1 of A the formula would be: fixed cost / (cm product A + 3 x cm product B)
10.) If 2 units of B are sold for every one unit of A the firm's break-even point in units of B would be calculated as: step 1: breakeven in composite units = fixed cost / (cont margin for product A + 2 x cont margin for product B) step 2: Breakeven in units B is 2 times the breakeven in composite units since there were two units of B and one of A for each composite unit. Breakeven in units A is the same as the number of composite units breakeven.
Note: If 3 units of B are sold for every 1 of A follow the steps above but insert 3 instead of 2 into the formulas.