5. Newton is considering investing in a higher quality raw material that will increase its direct materials cost by $1 per unit. It estimates that the higher quality raw material will increase sales by 1,000 units. What will be the company's revised variable costing net operating income (loss) if it invests in the higher quality raw material and continues to produce 25,000 units? 6. Newton is considering raising its selling price by $1.00 per unit with an expectation that it will lower unit sales by 1,500 units. What will be the company's revised variable costing net operating income (loss) if it raises its price by $1.00 and continues to produce 25,000 units? 7. What is Newton's break-even point in unit sales? What is its break-even point in dollar sales? 8. What is the company's projected margin of safety in its first year of operations?
5. Newton is considering investing in a higher quality raw material that will increase its direct materials cost by $1 per unit. It estimates that the higher quality raw material will increase sales by 1,000 units. What will be the company's revised variable costing net operating income (loss) if it invests in the higher quality raw material and continues to produce 25,000 units? 6. Newton is considering raising its selling price by $1.00 per unit with an expectation that it will lower unit sales by 1,500 units. What will be the company's revised variable costing net operating income (loss) if it raises its price by $1.00 and continues to produce 25,000 units? 7. What is Newton's break-even point in unit sales? What is its break-even point in dollar sales? 8. What is the company's projected margin of safety in its first year of operations?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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I just need question 5,7,8
Transcribed Image Text:5. Newton is considering investing in a higher quality raw material that will increase its direct materials cost by $1 per unit. It estimates
that the higher quality raw material will increase sales by 1,000 units. What will be the company's revised variable costing net operating
income (loss) if it invests in the higher quality raw material and continues to produce 25,000 units?
6. Newton is considering raising its selling price by $1.00 per unit with an expectation that it will lower unit sales by 1,500 units. What
will be the company's revised variable costing net operating income (loss) if it raises its price by $1.00 and continues to produce
25,000 units?
7. What is Newton's break-even point in unit sales? What is its break-even point in dollar sales?
8. What is the company's projected margin of safety in its first year of operations?
Transcribed Image Text:Newton Company manufactures and sells one product. The company assembled the following projections for its first year of
operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
$
$
$
20
Direct labor
16
Variable manufacturing overhead
Variable selling and administrative
Fixed costs per year:
4
Fixed manufacturing overhead
Fixed selling and administrative
$450,000
$ 70,000
expenses
During its first year of operations Newton expects to produce 25,000 units and sell 20,000 units. The budgeted selling price of the
company's only product is $66 per unit.
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