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2 years ago

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Break-Even Sales Currently, the unit selling price of a product is $7,520, the unit variable cost is $4,400, and the total fixed

costs are $23,400,000. A proposal is being evaluated to increase the unit selling price to $8,000. a. Compute the current break-even sales (units). units b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant. units

1 answer:

-Dominant- [34]2 years ago

5 0

Answer:

Current Break Even point = 6,500 units

Break Even point in Unit Sale = 7,500 units

Explanation:

The computation of break-even sales is shown below:-

Sale price = $8,000

Variable expense = $4,400

Contribution margin = Sale price - Variable expenses

= $8,000 - $4,400

= $3,600

Fixed expenses = $23,400,000

Current Break Even point = Fixed expenses ÷ Contribution margin

= $23,400,000 ÷ $3,600

= 6,500 units

Therefore for computing the break even point we simply divide contribution margin by fixed expenses

b. Sale price = $7,520

Variable expense = $4,400

Contribution margin =$7,520 - $4,400

= $3,120

Fixed expenses plus desired profit = $23,400,000

Break Even point in Unit Sale = Fixed expenses ÷ Contribution margin

= $23,400,000 ÷ $3,120

= 7,500 units

So, for computing the break even point we simply divide contribution margin by fixed expenses

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In each of the following cases, calculate the accounting break-even and the cash break-even points. Ignore any tax effects in ca

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Answer:

Accounting Break-Even

Case 1 = $14,350 Case 2 = $8,485.71 Case 3 = $214.375

Cash Break-Even

Case 1 = $11,766.67 Case 2 = $1342.86 Case 3 = $168.75

Explanation:

According to the scenario, computation of the given data are as follow:-

Accounting Break-Even = (Fixed Cost + Depreciation Cost) ÷ (Price Unit -Variable Unit)

Case 1 - ($7,060,000 + $1,550,000) ÷ ($3075 - $2,475)

= $8,610,000 ÷ $600

= $14,350

Case 2 - ( $47,000 + $250,000) ÷ ($96 - $61)

= $297,000 ÷ 35 = $8,485.71

Case 3 - ($2,700 + $730) ÷ ($21 - $5)

= $3,430 ÷ $16 = $214.375

Cash Break Even = Fixed Cost ÷ (Price Unit - Variable Unit)

Case 1 - $7,060,000 ÷ ($3075 - $2,475)

= $7,060,000 ÷ $600

= $11,766.67

Case 2 - $47,000 ÷ ($96 - $61)

= $47,000 ÷ $35 = $1342.86

Case 3 - $2,700 ÷ ($21 - $5)

= $2,700 ÷ $16 = $168.75

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1 year ago

Slotnick Chemical received $230,000 from customers as deposits on returnable containers during 2018. Ten percent of the containe

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Answer:

$20,909.09

Explanation:

We have been given that Slotnick Chemical received $230,000 from customers as deposits on returnable containers during 2018. 10% of the containers were not returned. The deposits are based on the container cost marked up 10%.

The price after mark-up would be $100\%+10\%=110\%$

To find the profit on the forfeited deposits, we will divide $230,000 times 10% by 110% as:

$\text{Profit on the forfeited deposits}=\frac{\$230,000\times 10\%}{110\%}$

$\text{Profit on the forfeited deposits}=\frac{\$230,000}{11}$

$\text{Profit on the forfeited deposits}=\$20,909.0909$

$\text{Profit on the forfeited deposits}\approx \$20,909.09$

Therefore, Slotnick realize a profit of $20,909.09 on the forfeited deposits.

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2 years ago

Samson's purchased a lot four years ago at a cost of $398,000. At that time, the firm spent $289,000 to build a small retail out

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Answer:

initial cash flow is 2,929,000

Explanation:

Attached is the table

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2 years ago

Canada and the U.S. both produce wheat and computer software. Canada is said to have the comparative advantage in producing whea

timurjin [86]

Answer:

The correct answer is <em>d. Canada requires fewer resources than the U.S. to produce a bushel of wheat.</em>

Explanation:

A country (in this case Canada) has a comparative advantage over another country (in this case the United States) to produce a certain product (in this case wheat) if the production costs of that product (wheat) are less than from the other country, regardless of the opportunity cost of producing that other product in that country.

The comparative advantage is based on the fact that the country has developed greater efficiency in the use of resources or that it has greater ease of access to them due to better conditions of nature, greater technological development in the field in question, human capital more specialized in that economic field, etc.

The opportunity cost of producing a product or another in the same country does not affect a deterioration or increase of the comparative advantage developed to produce such a product.

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p Marine International manufactures an aquarium pump and is trying to decide whether to produce the filter system in-house or si

navik [9.2K]

Answer:

Cost of in house production at 25000 units= $606250

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Thus, Marine international should produce the filter in house at a demand level of 25000 filters as the cost of in house production ($606250) is less than that of the outsourcing option ($750000).

Explanation:

To decide whether to outsource or not will depend on the total cost of each option incurred under certain production or demand level. The option providing the lowest total cost at that level will be chosen.

We first need to determine the cost of each option and see where the total cost for each item equates.

Cost of in house production = 300000 + 12.25x

Where, x is the number of units.

Cost of in house production = 300000 + 12.25 (25000)

Cost of in house production = $606250

Cost of outsourcing option = 30x

Cost of outsourcing option = 30 (25000)

Cost of outsourcing option = $750000

Thus, Marine international should produce the filter in house at a demand level of 25000 filters as the cost of in house production ($606250) is less than that of the outsourcing option ($750000).

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2 years ago