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2. Profit To produce 1 unit of a new product, a company determines that the cost for material is $2.50 and the cost of labor is $4. The fixed cost, regardless of sales volume, is $5000, If the cost to a wholesaler is $7.40 per unit, determine the least number of units that must be sold by the company to realize a profit.

2. Profit To produce 1 unit of a new product, a company determines that the cost for material is $2.50 and the cost of labor is $4. The fixed cost, regardless of sales volume, is $5000, If the cost to a wholesaler is $7.40 per unit, determine the least number of units that must be sold by the company to realize a profit.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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2and3
efore, the total n. least 35,001 copies must shloe b hoda PROBLEMS 1.3 1. Profit The Davis Company manufactures a product that has a unit selling price of $20 and a unit cost of $15, If fixed costs are $600,000, determine the least number of units that must be sold for the company to have a profit. 2. Profit To produce 1 unit of a new product, a company determines that the cost for material is $2.50 and the cost of labor is $4. The fixed cost, regardless of sales volume, is $5000, If the cost to a wholesaler is $7.40 per unit, determine the least number of units that must be sold by the company to realize a profit. 3. Leasing versus Purchasing A businesswoman wants to determine the difference between the costs of owning and leasìng an automobile. She can lease a car for $420 per month (on an annual basis), Under this plan, the cost per mile (gas and oil) is $0.06. If she were to purchase the car, the fixed annual expense would be $4700, and other costs would amount to $0.08 per mile. What is the least number of miles she would have to drive per year to make leasing no more expensive than purchasing? 4. Shirt Manufacturer A T-shirt manufacturer produces N shirts at a total labor cost (in dollars) of 1.3N and a total material cost of 0,4N, The fixed cost for the plant is $6500, If each shiìrt sells for $3.50, how many must be sold by the company to realize a profit?
Transcribed Image Text:efore, the total n. least 35,001 copies must shloe b hoda PROBLEMS 1.3 1. Profit The Davis Company manufactures a product that has a unit selling price of $20 and a unit cost of $15, If fixed costs are $600,000, determine the least number of units that must be sold for the company to have a profit. 2. Profit To produce 1 unit of a new product, a company determines that the cost for material is $2.50 and the cost of labor is $4. The fixed cost, regardless of sales volume, is $5000, If the cost to a wholesaler is $7.40 per unit, determine the least number of units that must be sold by the company to realize a profit. 3. Leasing versus Purchasing A businesswoman wants to determine the difference between the costs of owning and leasìng an automobile. She can lease a car for $420 per month (on an annual basis), Under this plan, the cost per mile (gas and oil) is $0.06. If she were to purchase the car, the fixed annual expense would be $4700, and other costs would amount to $0.08 per mile. What is the least number of miles she would have to drive per year to make leasing no more expensive than purchasing? 4. Shirt Manufacturer A T-shirt manufacturer produces N shirts at a total labor cost (in dollars) of 1.3N and a total material cost of 0,4N, The fixed cost for the plant is $6500, If each shiìrt sells for $3.50, how many must be sold by the company to realize a profit?
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