1. Calculating Costs and Break-Even [LO3] Night| Shades, Inc. (NSI), manufactures biotech sunglasses. The variable materials cost is $11.13 per unit, and the variable labor cost is $7.29 per unit. a. What is the variable cost per unit? b. Suppose the company incurs fixed costs of $875,000 during a year in which total production is 190,000 units. What are the total costs for the year? c. If the selling price is $44.99 per unit, does the company break even on a cash basis? If depreciation is $435,000 per year, what is the accounting break-even point?

1. Calculating Costs and Break-Even [LO3] Night| Shades, Inc. (NSI), manufactures biotech sunglasses. The variable materials cost is $11.13 per unit, and the variable labor cost is $7.29 per unit. a. What is the variable cost per unit? b. Suppose the company incurs fixed costs of $875,000 during a year in which total production is 190,000 units. What are the total costs for the year? c. If the selling price is $44.99 per unit, does the company break even on a cash basis? If depreciation is $435,000 per year, what is the accounting break-even point?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The constraint at Pickrel Corporation is time on a particular machine. The company makes three products that use this machine. Data concerning those products appear below: 9. VD JT SM Selling price per unit Variable cost per unit Minutes on the constraint $344.85 $415.40 $119.32 $270.18 $310.88 $ 91.96 Sklpped 5.70 6.70 1.90 Rank the products in order of their current profitability from most profitable to least profitable. In other words, rank the products in the order in which they should be emphasized. (Round your Intermedlate calculations to 2 declmal places.) Multiple Cholce JT, SM, VD JT. VD, SM VD, SM, JT SM, VD, JT Mc Graw < Prev 9 of 9 Next 68°F Mostly cloudy Type here to search DELL
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The Campbell Company is evaluating the proposed acquisition of a new milling machine. The machine’s base price is $108,000, and it would cost another $12, 500 to modify it for special use by your firm. The machine will be sold after three years for $65,000. The applicable depreciation rates are 33 percent, 45 percent, 15 percent, and 7 percent. The machine would require an increase in net operating working capital (inventory) of $5,500. The machine would have no effect on revenues, but is expected to save the firm $44,000 per year in before tax operating costs, mainly labor. Campbell’s marginal tax rate is 35 percent. What is the Net Investment (NINV)
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Howard Cooper, the president of Walton Computer Services, needs your help. He wonders about the potential effects on the firm's net income if he changes the service rate that the firm charges its customers. The following basic data pertain to fiscal Year 1: Standard rate and variable costs Service rate per hour Labor cost Overhead cost Selling, general, and administrative cost Expected fixed costs. Facility maintenance Selling, general, and administrative $ 65.00 30.00 5.65 3.40 $ 316,000 120,000 Required: a. Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide 29,000 hours of services in Year 1. b. A marketing consultant suggests to Mr. Cooper that the service rate may affect the number of service hours that the firm can achieve. According to the consultant's analysis, if Walton charges customers $60 per hour, the firm can achieve 34,000 hours of services. Prepare a flexible budget using the consultant's assumption. c. The same…

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