Answer A company is analyzing its break-evenpoint for a product with a selling priceof $50 per unit. The variable cost perunit is $30, and the fixed costs are$200,000 per year. If the companywants to achieve a profit of $50,000,how many units must it sell to meet thisprofit goal?

Total Revenue: Selling price per unit * Number of units soldTotal Cost: Fixed costs + (Variable cost…

Answered: A company is analyzing its break-even…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section14.A: Breakeven Analysis

Problem 4P

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Baghdad Company produces a single product. They have recently received the result of a market survey that indicates that they can increase the retail price of their product by 10% without losing customers or market share. All other costs will remain unchanged. If they enact the 10% price increase, what will be their new break-even point in units and dollars? Their most recent CVP analysis is:
Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
How many units must it sell?
A company is analyzing its break-even point for a product with a selling price of $50 per unit. The variable cost per unit is $30, and the fixed costs are $200,000 per year. If the company wants to achieve a profit of $50,000, how many units must it sell to meet this profit goal?
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
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?
Give true answer
I have the following additional questions: 1) Calculate the breakeven point in dollars under the current scenario 2) Calculate the number of units to be sold if the company desires a target profit of $225,000. 3) Calculate the sales dollars if the company desires a target profit of $225,000.
A product currently sells for $12 per unit. The variable costs are $4 per unit, and 10,000 units are sold annually and a profit of $30,000 is realized per year. A new design will increase the variable costs by 20% and Fixed Costs by 10% but sales will increase to 12,000 units per year. (a) At what selling price do we break even with the new design?. (b) If the selling price is to be kept same ($12/unit) what will the annual profit be?
Groove auto is considering the introduction of a new model of wireless speakers with the following price and cost characteristics.sales price 443.00 per unit.variable cost 203.00 per unit.fixed costs 715,000assume that the projected number of units sold for the year is 4 400.consider requirement b,c,d independent from each other. [a] What will the operating profit be? [b] What is the impact of operating profit if the sales price decreases by twenty percent increases by ten percent? [c] What is the impact on operating profit A veritable cost per unit decrease by ten percent increase by twenty? [d] Suppose that fixed costs for the year are 20% lower. Than projected and bearable costs per unit are 10% higher than projected. What impact will these costs changes have on operating profit for the year Kindly solve b c and d
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A company is analyzing its break-even point for a product with a selling price of $50 per unit. The variable cost per unit is $30, and the fixed costs are $200,000 per year. If the company wants to achieve a profit of $50,000, how many units must it sell to meet this profit goal?