A firm manufactures a product that sells for $25 per unit. Variable cost per unit is $2 and fixed cost per period is $1840. Capacity per period is 2000 units.(a) Develop an algebraic statement for the revenue function and the cost function.(b) Determine the number of units required to be sold to break even.(c) Compute the break-even point as a percent of capacity.(d) Compute the break-even point in sales dollars.

BREAKEVEN POINTBreak Even means the volume of production or sales where there is no profit or…

Answered: A firm manufactures a product that…

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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Assume the following (1) sales = $200,000, (2) unit sales = 10,000, (3) the contribution margin ratio = 37%, and (4) net operating income = $10,000. Given these four assumptions, which of the following is true? Multiple Choice The total fixed expenses = $126,000 The variable expense per unit = $7.40 The total contribution margin = $74,000 The break-even point is 8,077 units
The selling price of a particular product is $81.00 per unit, the variable expense is $55.00 per unit, and the breakeven sales in dollars is $243,000, what are the total fixed expenses?
Suppose a firm with a production function given by Q = 30K0.5L0.5 produces 4,000 units of output. The firm pays a wage of $50 per unit and pays a rental rate of capital of $30 per unit. MPL = 15K0.5/L0.5 and MPK = 15L0.5/K0.5. How many units of labor and capital should the firm employ to minimize the cost of producing 4,000 units of output, and what would be the total cost?
A firm has the capacity to produce 599,374 units of a product each year. At present, it is operating at 21 percent of capacity. The firm's annual revenue is $1,054,613. Annual fixed costs are $346,003 and the variable costs are $.51 cents per unit. The following equations will be useful. Profit = Revenue - Costs Revenue = Price each * quantity Costs = Fixed Cost + Variable Costs Variable Cost = Variable Cost per unit * number of units At the break even point, Profit = 0 What is the price for each unit?
Given that the total cost, C, is related to sales volume, x, by the equation y=1000+0.2x, say true or false for the following and proof it. (a) The cost-sales line rises $2 for each increase of $10 in sales volume. (b) The slope of the line is interpreted as variable cost
Assume the following (1) selling price per unit = $30, (2) variable expense per unit = $18, and (3) total fixed expenses = $31,800. Given these three assumptions, the unit sales needed to achieve a target profit of $11,700 is: Multiple Choice O O 3,625 units. 15,325 units. 58,825 units. 43,500 units.
Reid Company is considering the production of a new product. The expected variable cost is $24 per unit. Annual fixed costs are expected to be $892,500. The anticipated sales price is $75 each. Required Determine the break-even point in units and dollars using each of the following: Use the equation method. Use the contribution margin per unit approach. Use the contribution margin ratio approach. (Do not round intermediate calculations. Round "Contribution margin ratio" to 1 decimal place. (i.e., 0.234 should be entered as 23.4))
A factory is producing a new product, and it is your job to help decide what price will produce maximum for your company. Your accounting department has told you that the profit can be estimated by the formula P(x)= 16=6x^2-x^3, where x is the selling price. Determine the selling price that produces the maximum profit. A.) Find the critical values. B.) Determine the selling price.
a. Given the following graphs, calculate the total fixed costs, variable costs per unit, andsales price for Firm A. Firm B’s fixed costs are $120,000, its variable costs per unit are$4, and its sales price is $8 per unit.b. Which firm has the higher operating leverage at any given level of sales? Explain.c. At what sales level, in units, do both firms earn the same operating profit?
For a certain product, the linear demand curve is described by the equation, Quantity = 15,449 - 405 * Price. Variable cost to manufacture this product is $8 per unit. Calculate optimal price for this product. Rounding: penny.
How do I find the dollar sales volume to produce an income of 864,000 before taxes when the maximum capacity with present facilities = 40,000 units, total fixed costs per period = 468,000, variable cost per unit = 128, and sales price per unit = 212?
1. Calculate the contribution margin rate, the sales dollar breakeven point, and the unit sales breakeven point. 2. Use the following information to perform your calculations. a. Net Sales: $50,000.00 b. Contribution Margin: $20,000.00 c. Total Fixed Costs: $15,500.00 d. Unit Sales Price: $25.00 3. Provide the formula and write out the equation that you use for each calculation. a. Contribution Margin Rate: b. Sales Dollar Breakeven Point: C. Unit Sales Breakeven Point:

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