5) Istanbul Company manufactures product A and is thinking reducing the price by 50 TL per unit for the coming year. If the priceis reduced, demand is expected to increase by 6,000 units. If the price is reduced, operating profit will:DemandSelling priceIncremental cost per unitA) increase by 800,000 TLB) decrease by 800,000 TLC) increase by 1,200,000 TLD) decrease by 1,400,000 TLE) increase by 1,000,000 TLCurrently40,000 units450300Projected46,000 units400300

Lets understand the basics.Operating profit is profit earned after deducting all cost of…

Answered: 5) Istanbul Company manufactures…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 7EA: Flanders Manufacturing is considering purchasing a new machine that will reduce variable costs per...

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Flanders Manufacturing is considering purchasing a new machine that will reduce variable costs per part produced by $0.15. The machine will increase fixed costs by $18,250 per year. The information they will use to consider these changes is shown here.
Suppose executives estimate that the unit variable cost for their DVD recorder is $100, the fixed cost related to the product is $10 million annually, and the target volume for next year is 100,000 recorders. What sales price will be necessary to achieve a target profit of $l million?
(b) The cost of materials is expected to rise by 20%, while total fixed costs are expected to rise by RM13,000 per year:Calculate the number of units that must be sold for the company's net profit to be maintained. Assume that the rest of the data is unchanged. Determine a new break-even point and margin of safety in bottles if the selling price change to RM 6 per packet. Assume that all other variables remain constant. please provide calculations for each of them.
A mobile manufacturer company plans to produce 50000 mobiles this year. The company will sell for 150 OMR each. The fixed cost of the company 3 million and total variable costs are 5 million OMR. (a) Calculate the break-even point? (b) Suppose the company wanted to produce 100000 mobiles in the next year. How breakeven point will change.
Assume a company is considering adding a new product. The expected cost and revenue data for this product are as follows: Annual sales 5,000 units Unit selling price $ 60 Unit variable costs: Production $ 33 Selling $ 6 Incremental fixed costs per year: Production $ 34,500 Selling $ 45,000 If the company adds the new product, it expects the contribution margin of other product lines to drop by $15,300 per year. What is the financial advantage (disadvantage) of adding the new product? Multiple Choice $40,800 $10,200 $89,700 $25,500
Company XYZ is currently operating with a 60% contribution margin. The company is planning an upgrade in its production facilities, which is expected to increase sales by $15,000O. However, this upgrade is expected to increase fixed costs of $2,500. What would be the expected change in profit? O a. Decrease by $2,500 O b. Increase by $15,000 O C. Increase by $12,500 O d. Decrease by $6,000 O e. Increase by $6,500
1. Assuming that the fixed costs are expected to remain at 200,000 for the coming year and the sales price per unit and variable costs per unit are also expected to remain constant, how much profit after taxes will be produced if the company anticipates sales for the coming year rising to 125 percent of the current year's level?
The Future company for furniture is considering an expansion plan from the current production level of 120000 units to 132000 units. Fixed cost will increase by $24,000 and variable cost will increase by $ 1.5 /unit for each extra unit. Currently the fixed cost is $ 220,000, variable cost is $5 /unit and selling price is $10. The company will decrease the selling price by 10% to be able to sell the new volume of 132000 units. Should the company expand by working extra hours? By adding new machines? What is Q indifferent (quantity at which the increase in fixed cost equals the increase in variable cost) for this situation?
Royal Enterprises has presented the following information for your analysis. Selling price per unit is $20 and variable cost per unit is $12 and fixed costs are $10,000. They sold 2000 units currently and management considers increasing selling price 10% next year. 1. What is current breakeven units? 2. What are current profits? 3. What would be breakeven units next year after they increased 10% selling price per unit?
Troy City Inc., manufactures a product and is considering raising the price by $20 a unit for the coming year. With a $20 price increase, demand is expected to fall by 2,500 units. Currently Projected Demand 21,000 units 18,500 units Selling Price $170 $190 Variable costs per unit $110 $110 Would you recommend the $20 price increase? A. Yes, because operating income increases. B. Yes, because inventory turnover increases. C. No, because demand decreased. D. No, because the contribution margin decreases.
Sedgwick Inc. is considering Plan 1 which is estimated to have sales of $40,000 and costs of $15,500. The company currently has sales of $37,000 and costs of $14,000.Compare plans using incremental analysis. If Plan 1 is selected, there would be incremental decreaseincrease in profit by $ .
(Break-even point and selling price) Specialty Steel, Inc. will manufacture and sell 230,000 units next year. Fixed costs will total $320,000, and variable costs will be 50 percent of sales. a. The firm wants to achieve a level of earnings before interest and taxes of $270,000. What selling price per unit is necessary to achieve this result? b. Set up a pro forma income statement to verify your solution to part a. a. What selling price per unit is necessary to achieve a level of earnings before interest and taxes of $270,000? (Round to three decimal places.)

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