A plant has a capacity of 4,100 hydraulic pumps per month. The fixed cost is $504,000 per month. The variable cost is $166 per pump, and the sales price is $328 per pump. (Assume that sales equal output volume.) What is the breakeven point in number of pumps per month? What percentage reduction will occur in the breakeven point if fixed costs are reduced by 18% and unit variable costs by 6%?

A plant has a capacity of 4,100 hydraulic pumps per month. The fixed cost is $504,000 per month. The variable cost is $166 per pump, and the sales price is $328 per pump. (Assume that sales equal output volume.) What is the breakeven point in number of pumps per month? What percentage reduction will occur in the breakeven point if fixed costs are reduced by 18% and unit variable costs by 6%?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

1. Compute the break-even point in units. 2. What will the new break-even point be if fixed costs increase by 15 percent? Round answer to the nearest whole number.
Marsh Motors sells 5,000 motors a year for $30 apiece. Variable costs are $8 per unit, and total fixed costs are $85,000 a year. If the company wants to earn $6 net income per motor sold, approximately how many motors must it sell?
21) The initial cost for a factory is $ 6M. The major product of the factory has revenue of $100 per unit and $55 per unit as a variable cost. Based on the given, find the following: (a) QBE per year. (b) the annual profit if the expected sales between 100,000 and 200,000.
Harrison Company expects to sell 200,000 units of its product next year, which would generate total sales of $17,000,000. Management predicts that income for next year will be $1,250,000 and that the contribution margin per unit will be $25. Complete the below table to calculate the next year's expected variable costs and fixed costs. HARRISON COMPANY Forecasted Contribution Margin Income Statement Units $ per unit Contribution margin 200,000 $ 25
A small manufacturing operation can produce up to 300 units per week of a product that sells for $40 per unit. The variable cost per unit is $25, and the fixed cost per week is $3825. (a) What is the break-even point expressed as a percent of capacity? and (b) What would be the net income at 95% capacity?
Glassman Company sells its one product at $30 per unit. Variable costs are $25 per unit and fixed costs are $50,000 per month1. What is its break-even point in units?2. What is its break-even point in sales dollars?3. What sales, in units, are required to earn $20,000 for the month?4. What sales, in dollars, are required to earn $20,000 for the month?5. Suppose Glassman reduces its selling price to $28 because competitors are charging that amount. What is its new break- even point (a) in units? (b) in dollars?
Currently, the unit selling price of a product is $1,500, the unit variable cost is $1,200, and the total fixed costs are $4,500,000. A proposal is being evaluated to increase the unit selling price to $1,600. Compute the current break-even sales (units).Answer Check Figure: 15,000 units Compute the anticipated break-even sales (units), assuming that the unit selling price is increased to the proposed $1,600, and all costs remain constant.
Currently the unit selling price of a product is $200, the unit variable cost is $110, and the total fixed costs are $585,000. A proposal is being evaluated to increase the unit selling price to $275. Under the proposed plan, the variable cost per unit and the total fixed cost will not change. 1) Calculate the contribution margin per unit. 2) Calculate the contribution margin ratio. 3) Calculate the breakeven point in units under the current scenario.
A plant operating at 100% capacity (1000 kg product per year) has an annual net profit of $40,000 with a 34% tax on gross profits. If the annual fxed costs are $100,000 and variable costs are 61% of net sales, what is the break-even point (in per cent capacity or kgproduct per year)? What is the unit profit (i.e, profit per kg product) at 100% capacity?
A product has a daily demand 60 unitsOrdering cost RO 200, and holding cost RO 3 per unit per year. The EOQ model is appropriate. The cost-minimizing solution for this product will cost per year in total annual inventory (holding and ordering) costs. Assume there a total of 250 workdays per yearRound-up to the nearest integer
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?
A company expects to sell 75,000 widgets at a price of $10.00. The unit variable costs are estimated at $8.00, and the fixed costs are estimated at $125,000. On the basis of this information, calculate the following: 1. Contribution margin 2. PV ratio 3. Revenue break-even by using the PV ratio 4. Profit generated