10 For questions 10-12, refer to the following problem: A manufacturing company is planning to make a newly developed product. Annual fixed cost for manufacturing of the product is $60,000. The selling price is $ unit, and the variable cost is $6/unit. 10. To break even; the annual production level for the company needs to be at, a. 10,000 units b. 20,000 units c. 15,000 units d. 6,000 units 11. To make profit of $16,000; the annual production level for the company needs to be at, a. 19,000 units b. 19,500 units c. 20,000 units d. 31,000 units 12. If the company sets annual production at 12,000 units, what must the selling price be to beak even. Assume annual fixed cost is still $60,000 and unit varable cost is S unit. a. $15/unit b. $10/unit c. $12/unit d. S₁ unit For questions 13-16, refer to the following problem: A company is considering two
10 For questions 10-12, refer to the following problem: A manufacturing company is planning to make a newly developed product. Annual fixed cost for manufacturing of the product is $60,000. The selling price is $ unit, and the variable cost is $6/unit. 10. To break even; the annual production level for the company needs to be at, a. 10,000 units b. 20,000 units c. 15,000 units d. 6,000 units 11. To make profit of $16,000; the annual production level for the company needs to be at, a. 19,000 units b. 19,500 units c. 20,000 units d. 31,000 units 12. If the company sets annual production at 12,000 units, what must the selling price be to beak even. Assume annual fixed cost is still $60,000 and unit varable cost is S unit. a. $15/unit b. $10/unit c. $12/unit d. S₁ unit For questions 13-16, refer to the following problem: A company is considering two
Chapter14: Capital Structure Management In Practice
Section14.A: Breakeven Analysis
Problem 4P
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Topic Video
Question
![10
11
For questions 10-12, refer to the following problem: A manufacturing company is planning to make a newly developed product. Annual fixed cost for manufacturing of the product is $60,000. The selling price is S
unit, and the variable cost is $6/unit. 10. To break even; the annual production level for the company needs to be at, a. 10,000 units b. 20,000 units c. 15,000 units d. 6,000 units 11. To make profit of $16,000; the
annual production level for the company needs to be at, a. 19,000 units b. 19,500 units c. 20,000 units d. 31,000 units 12. If the company sets annual production at 12,000 units, what must the selling price be to
beak even. Assume annual fixed cost is still $60,000 and unit varable cost is $- unit. a. $15/unit b. $10/unit c. $12/unit d. Sunit For questions 13 - 16, refer to the following problem: A company is considering two
options for production of a part needed in manufacturing process. Cost information for these two options is as follows: \table[[ALTERNATIVE, FIXED COST, VARIABLE COST], [Special - Purpose Equipment, $250,000 per
year, $10 per unit]. [General - Purpose Equipment,$50,000 per year, $20 per unit]] Using the above information, answer the following questions: 13. What is the break even quantity between the two options? a. 20,000
units per year b. 40,000 units per year c. 25,000 units per year d. 50,000 units per year What are the total costs under the Specil Pupuse Rqupunent opion for an annual quantily of 50, 000 units? a. $1,000,000 b.,$
750.000 c., $500.000 d. SR50,000 What are the total costs under the Constal Pupow Rumprient pption for an anual quantity of 50,000 mits? Si00,000 b., $450,000 c., $800,000 d., $1.050,000 For what range of
ouput is the spetwi Pupustequpment the low cost option? a. more thas 40,000 units per year b. more than 20,000 units per year c. 0 - 20,000 unis per year d. 0 = 40,000 unis per year](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F33acded1-59cb-4b02-97f4-595245a35fc5%2F3a9be2c0-cd62-4c5a-86f6-9209fd17f49f%2Fkq4b7a5_processed.png&w=3840&q=75)
Transcribed Image Text:10
11
For questions 10-12, refer to the following problem: A manufacturing company is planning to make a newly developed product. Annual fixed cost for manufacturing of the product is $60,000. The selling price is S
unit, and the variable cost is $6/unit. 10. To break even; the annual production level for the company needs to be at, a. 10,000 units b. 20,000 units c. 15,000 units d. 6,000 units 11. To make profit of $16,000; the
annual production level for the company needs to be at, a. 19,000 units b. 19,500 units c. 20,000 units d. 31,000 units 12. If the company sets annual production at 12,000 units, what must the selling price be to
beak even. Assume annual fixed cost is still $60,000 and unit varable cost is $- unit. a. $15/unit b. $10/unit c. $12/unit d. Sunit For questions 13 - 16, refer to the following problem: A company is considering two
options for production of a part needed in manufacturing process. Cost information for these two options is as follows: \table[[ALTERNATIVE, FIXED COST, VARIABLE COST], [Special - Purpose Equipment, $250,000 per
year, $10 per unit]. [General - Purpose Equipment,$50,000 per year, $20 per unit]] Using the above information, answer the following questions: 13. What is the break even quantity between the two options? a. 20,000
units per year b. 40,000 units per year c. 25,000 units per year d. 50,000 units per year What are the total costs under the Specil Pupuse Rqupunent opion for an annual quantily of 50, 000 units? a. $1,000,000 b.,$
750.000 c., $500.000 d. SR50,000 What are the total costs under the Constal Pupow Rumprient pption for an anual quantity of 50,000 mits? Si00,000 b., $450,000 c., $800,000 d., $1.050,000 For what range of
ouput is the spetwi Pupustequpment the low cost option? a. more thas 40,000 units per year b. more than 20,000 units per year c. 0 - 20,000 unis per year d. 0 = 40,000 unis per year
Transcribed Image Text:14.
What are the total costs under the Special-Purpose Equipment option for an annual
quantity of 50,000 units?
$1.000.000
b.
$750,000
C.
15.
P
$500.000
$850.000
What are the total costs under the General-Purpose Equipment option for an annual
quantity of 50,000 units?
$400.000
b.
$450.000
$800,000
d.
$1,050.000
16.
For what range of output is the Special-Purpose equipment the low-cost option?
more than 40,000 units per year
b.
more than 20,000 units per year
0-20.000 units per year
d.
0-40,000 units per year
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