A firm, which sells widgets, has annual fixed costs of $29,000,000. Each widget sells for $21 and takes $7 in variable costs to manufacture. If sales volume last year was $30,000,000, what is the number of widgets the firm must sell to have EBIT = 0? (Round up to answer nearest unit)

A firm, which sells widgets, has annual fixed costs of $29,000,000. Each widget sells for $21 and takes $7 in variable costs to manufacture. If sales volume last year was $30,000,000, what is the number of widgets the firm must sell to have EBIT = 0? (Round up to answer nearest unit)

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 10E: Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22...

See similar textbooks

Related questions

Q: cost accounting

A: To calculate Return on Total Assets (ROA), use this formula: ROA = (Net Income / Average Total…

Q: Hello tutor i need help in this problem

A: Required A:The current ratio is defined as: Current Ratio = Current Assets / Current…

Q: hi expert please help me accounting

A: Step 1: Definition of Allocation of ExpensesAllocation of expenses refers to distributing a shared…

Q: how many dollars woth of sale are generated from every s1 in total assets ? accounting

A: Step 1: Definition of Total Asset TurnoverTotal asset turnover is a financial ratio that measures a…

Q: I am looking for the correct answer to this general accounting question with appropriate…

A: Step 1: Define Journal EntryA journal entry is the formal recording of a financial transaction in…

Q: what is the length of the operating cycle??

A: Step 1: Definition of the Operating CycleThe operating cycle is the total time it takes for a…

Q: What is the gross profit?

A: Step 1: Definition of Gross ProfitGross Profit is the difference between sales revenue and the cost…

Q: what is the annual interest rate? accounting question

A: Step 1: Definition of Annual Interest RateThe annual interest rate is the percentage of the loan…

Q: I am searching for the correct answer to this general accounting problem with proper accounting…

A: Step 1: Define Plantwide Overhead RateA plantwide overhead rate applies all estimated overhead costs…

Q: None

A: Cash Proceeds = Face Value * % of face value Cash Proceeds = 750,000*96% Cash Proceeds = $720,000

Q: Brighton Audio produces and sells portable speakers. Each speaker sells for $45, and the variable…

A: Step 1: Definition of Contribution Margin per UnitContribution Margin per Unit is the amount of…

Q: Rose Corp. If sales are $500,000, variable costs are 68% of sales, and operating income is $50,000,…

A: Calculate Contribution MarginThe contribution margin is the amount remaining from sales revenue…

Q: The per-unit standards for direct labor are 3 direct labor hours at $12 per hour. If in producing…

A: Concept of Standard Direct Labor Hours:Standard direct labor hours refer to the amount of time a…

Q: Vanguard's gross profit percentage is ?

A: Step 1: DefinitionsConcept of Gross Profit Percentage:Gross profit percentage is a financial metric…

Q: Please explain the solution to this financial accounting problem with accurate principles.

A: Step 1: Definition of Market Price per ShareThe market price per share refers to the price at which…

Q: Determine the missing amount

A: Explanation of Assets: Assets are economic resources owned or controlled by a business that provide…

Q: I am looking for the correct answer to this financial accounting problem using valid accounting…

A: To find Falcon Corp.'s implied price-earnings (P/E) ratio, follow these steps: Step 1: Calculate Net…

Q: Financial accounting

A: Step 1: Definition of Operating LeverageOperating leverage measures how a company's operating income…

Q: Compute the company's asset turnover for 2023.??

A: Step 1: Definition of Asset Turnover Asset Turnover is a key financial metric used to measure how…

Q: All credit sales are collected in the month following the sale.

A: Concept of Cash Sales:Cash sales refer to the portion of total sales that are received immediately…

Q: Can you solve this financial accounting problem with appropriate steps and explanations?

A: Step 1: Define Return on Assets (ROA)Return on Assets (ROA) is a financial metric that measures a…

Q: Can you solve this general accounting problem using appropriate accounting principles?

A: Step 1: Definition of Days' Sales UncollectedDays' sales uncollected, also known as the Days Sales…

Q: Subject financial accounting

A: Step 1: Definition of Period CostsPeriod costs are costs that are not directly tied to the…

Q: Please provide the accurate answer to this general accounting problem using appropriate methods.

A: Step 1: Define Weighted-Average Method in Process CostingThe weighted-average method calculates the…

Q: I am looking for the correct answer to this financial accounting problem using valid accounting…

A: Step 1: Definition of Actual Cost of Direct Materials UsedThe actual cost of direct materials used…

Q: the straight-line method?

A: To calculate the annual depreciation expense using the straight-line method, use this formula:…

Q: General accounting

A: Step 1: Definition of Direct Materials Price VarianceThe direct materials price variance measures…

Q: Answer this

A: Explanation of Net Income: Net income represents the financial result of a company's operations over…

Q: What is the maturity value of the note on Mar.1?

A: To determine the maturity value of the note, we'll calculate the interest on the note and then add…

Q: Can you help me solve this financial accounting question using the correct financial procedures?

A: Step 1: Define Return on Equity (ROE)Return on Equity (ROE) measures a company's profitability…

Q: I need assistance with this general accounting question using appropriate principles.

A: Step 1: Definition of Earnings per Share (EPS)Earnings per share (EPS) is a company's profit divided…

Q: I need help finding the accurate solution to this general accounting problem with valid methods.

A: Step 1: Definition of Owner's EquityOwner's equity represents the owner's residual interest in the…

Q: Agni Corporation's net income for the year is $490,000. On June 30, a $0.75 per share cash dividend…

A: Explanation of Retained Earnings:Retained earnings represent the cumulative profits of a company…

Q: Solve this

A: Explanation of Cash Receipts: Cash receipts represent the actual inflow of cash that a business…

Q: Solve this Accounting 4 POINTS

A: Explanation of Revenue Accounts:Revenue accounts track the income a company earns from its normal…

Q: provide correct answer accounting question

A: Step 1: Definition of Average Collection PeriodThe Average Collection Period, also known as Days…

Q: White Co. incurs a cost of $17 per pound to produce Product X, which it sells for $25 per pound. The…

A: Explanation: In the given case, we are required to calculate the differential cost of producing…

Q: help me to solve this question

A: Step 1: Definition of Straight-Line DepreciationStraight-Line Depreciation is a method where the…

Q: need help this question

A: To calculate how much more money the bank can create, we use the money multiplier formula: Money…

Q: calculate the companys debt to equity ratio ?

A: Here's how to calculate the debt-to-equity ratio: Understanding the RatiosDebt Ratio: This ratio…

Q: accounting?

A: Step 1: Definition of Fixed Asset Sales CalculationTo determine how much in fixed assets was sold,…

Q: The per-unit standards for direct labor are 1.8 direct labor hours at $16 per hour. If, in producing…

A: Step 1: Calculate the standard direct labor costStandard direct labor hours per unit = 1.8…

Q: financial accounting

A: Step 1: Definition of Interest on a NoteInterest on a note is the amount the borrower pays the…

Q: hi expert please help me

A: To allocate the utility expense to Department B, we need to calculate the percentage of total sales…

Q: I need help with this solution and accounting question

A: Step 1: Definition of Total AssetsTotal Assets represent the entire value of everything a business…

Q: I need help solving this financial accounting question with the proper methodology.

A: Step 1: Define Retained Profit/LossRetained profit (also known as retained earnings) refers to the…

Q: Compute the rate of return for an investor who pays $10 for a stock and sells the stock one year…

A: Rate of return = (Selling Price + Dividends - Purchase Price)/Purchase Price Rate of return =…

Q: managerial accounting

A: Step 1: Definition of Rate of ReturnThe Rate of Return (RoR) is the percentage gain or loss an…

Q: Determine the missing values for each entity Accounting question

A: Step 1: Definition of Accounting EquationThe accounting equation is the foundation of double-entry…

Q: Estimated MHs at the beginning of the period were?

A: Explanation of Manufacturing Overhead (MOH): Manufacturing overhead encompasses all indirect costs…

Question

What is the number of widgets the firm must sell?

A firm, which sells widgets, has annual fixed
costs of $29,000,000. Each widget sells for
$21 and takes $7 in variable costs to
manufacture. If sales volume last year was
$30,000,000, what is the number of widgets
the firm must sell to have EBIT = 0? (Round
up to answer nearest unit)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

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?
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:
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.
Gelbart Company manufactures gas grills. Fixed costs amount to 16,335,000 per year. Variable costs per gas grill are 225, and the average price per gas grill is 600. Required: 1. How many gas grills must Gelbart Company sell to break even? 2. If Gelbart Company sells 46,775 gas grills in a year, what is the operating income? 3. If Gelbart Companys variable costs increase to 240 per grill while the price and fixed costs remain unchanged, what is the new break-even point?
Marchete Company produces a single product. They have recently received the results of a market survey that indicates that they can increase the retail price of their product by 8% without losing customers or market share. All other costs will remain unchanged. Their most recent CVP analysis is shown. If they enact the 8% price increase, what will be their new break-even point in units and dollars?
If a company has fixed costs of $6.000 per month and their product that sells for $200 has a contribution margin ratio of 30%, how many units must they sell in order to break even? A. 100 B. 180 C. 200 D. 2,000
Suppose the company has just the opposite news and now expects unit sales for August, September, and October to be double (200%) the original estimates. What effect will this have on the company’s net income and borrowing? Explain your findings.
Hammond Company runs a driving range and golf shop. The budgeted income statement for the coming year is as follows. Required: 1. What is Hammonds variable cost ratio? Its contribution margin ratio? 2. Suppose Hammonds actual revenues are 200,000 greater than budgeted. By how much will before-tax profits increase? Give the answer without preparing a new income statement. 3. How much sales revenue must Hammond earn in order to break even? What is the expected margin of safety? (Round your answers to the nearest dollar.) 4. How much sales revenue must Hammond generate to earn a before-tax profit of 130,000? An after-tax profit of 90,000? (Round your answers to the nearest dollar.) Prepare a contribution margin income statement to verify the accuracy of your last answer.
Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90. The companys monthly fixed expenses are $180,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of October when they will sell 10,000 units. How many units will Cadre need to sell in order to realize a target profit of $300,000? What dollar sales will Cadre need to generate in order to realize a target profit of $300,000? Construct a contribution margin income statement for the month of August that reflects $2,400,000 in sales revenue for Cadre, Inc.
Klamath Company produces a single product. The projected income statement for the coming year is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. 2. Suppose 10,000 units are sold above break-even. What is the operating income? 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. (Note: Round the contribution margin ratio to four decimal places, and round the sales revenue to the nearest dollar.) Suppose that revenues are 200,000 more than expected for the coming year. What would the total operating income be?
Delta Co. sells a product for $150 per unit. The variable cost per unit is $90 and fixed costs are $15,250. Delta Co.s tax rate is 36% and the company wants to earn $44,000 after taxes. What would be Deltas desired pre-tax income? What would be break-even point in units to reach the income goal of $44,000 after taxes? What would be break-even point in sales dollars to reach the income goal of $44000 after taxes? Create a contribution margin income statement to show that the break-even point calculated in B, generates the desired after-tax income.
Caduceus Company is considering the purchase of a new piece of factory equipment that will cost $565,000 and will generate $135,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return In Excel, see Appendix C.