The data for a production time-based breakeven problem is in Table 4.6.Lalculate the following items:a) Shutdown breakeven point-unitsb) Cost breakeven point-unitsc) Required return breakeven point-unitsd) Required return after taxes breakeven pointTable 4.6: Data for production time-based breakeven analysisItem$/HourDecimalSales Revenue24,000Production (Manufacturing) CostsFixed Costs12Variable Costs6.Semi-variable Costs3.4,000Overhead Costs12Required Return (Profit)Tax Rate (25%)1,5000.255.

Note: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts…

Answered: a) Shutdown breakeven point-units b)…

a) Shutdown breakeven point-units b) Cost breakeven point-units c) Required return breakeven point-units d) Required return after taxes breakeven point

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Related questions

Q: Select all of the options that, if changed, would affect the break-even point. Check All That Apply…

A: Break-even point is defined as the volume of production where the total cost is equal to the total…

Q: Which of the following ratios indicates the percentage of each sales dollar that is available to…

A: The objective of the question is to identify the correct ratio that indicates the percentage of each…

Q: The amount of a unit’s sales price that helps to cover fixed expenses is its ________.A.…

A: There are two type of costs being incurred in business. One is fixed costs and other is variable…

Q: contribution margin will decrease if sales remain the same and:

A: Contribution Margin: The Contribution Margin is also can be treated on a gross or per unit basis.…

Q: Which of the following conditions would cause the break-even point to increase? Oa. total fixed…

A: The break even point the fixed cost of the production of the material is equal to the difference in…

Q: All of the following represents a cost-volume- profit relationship except: a. Total contribution…

A: Cost profit volume analysis relationship shows how the profit of a entity changes due to change in…

Q: Discuss the following components of break-even analysis: fixed costs, variable and semi-variable…

A: Break-even point: It is the point at which the contribution margin earned on sales is equal to fixed…

Q: Which of the following does not represent a cost-volume-profit analysis equation? a. Contribution…

A: Your choice is incorrect because option b. Is represent a cost volume profit analysis equation. The…

Q: Managers have some flexibility in setting the estimated useful lives of depreciable assets. Explain…

A: The managers can determine the useful life of assets. The depreciation per year depends on this…

Q: How will increases in the following items affect residual income? Increase in Increase in Sales…

A: The net income is calculated as difference between revenue and expenses. The residual income is…

Q: The break-even point is where a.Revenues Costs. c.Revenues = Costs. d.Revenues = Fixed Costs.

A: Formula: Break even units = Fixed cost / Unit contribution margin.

Q: Which of the following describes the behavior of the fixed cost per unit?

A: Fixed cost is the cost which is doesnt change gets effects with the change in production which means…

Q: Which of the following is not a correct definition of the breakeven point? A.the point where total…

A: At Breakeven Point, Total Profits are equal to zero, Contribution Margin equal to Total Fixed…

Q: Match each term with the best definition or descriptor. NPV is __________ ( a unitless ratio, a…

A: Solution:- Net Present Value (NPV) means the net present value of cash inflows after the deduction…

Q: On a cost-volume-profit graph, when the Total Cost line is higher than the Total Revenue line, the…

A: Solution:- Cost-volume-profit graph is the graph which measures the loss, profit and break-even…

Q: Which of the following does not represent a cost-volume-profit analysis equation? O a. Sales - fixed…

A: Cost-volume-profit equation: Profit = Revenue – Fixed Costs – Variable Costs

Q: 9. The point where the sales line and the total expense line intersects represents the A. profit…

A: Sales line: Sales line represents the sales incurred by the company over the specific period.…

Q: Question 1 Peterman Inc. provides an automobile to Ms. Winters for her to use in carrying out her…

A: Common examples of taxable perks include gym memberships, transit passes, boarding, lodging,…

Q: The is the amount remaining from sales revenue after all variable expenses have been deducted a.…

A: Sale revenue is the amount of revenue earned by the entity by selling goods in the market. It is…

Q: Let P(x) be the annual profit for a certain product, where x is the amount of money spent on…

A: Solution- (A) P(o) represents the amount of annual profit allocated when x=0 or when no money was…

Q: In making a short-term special decision, which of the following is MOST important? a. Use a…

A: Solution Concept The decision that is to be taken differs from one another on the basis of the time…

Q: In the cost-volume- profit graph (above), what is represented by the point marked "B"?

A: Break even point- This is the point where the company will make no profit and no loss, its the point…

Q: Incremental costs are the ________ generated by a proposed alternative. A) additional revenues B)…

A: Incremental costs are the total additional costs incurred or the

Q: In the cost-volume-profit graph,a. the break-even point is found where the total revenue curve…

A: A graphical representation of the relationship between production costs and total sales is shown by…

Q: Henderson Farms reports the following results for the month of November: Sales (10,000 units)…

A: Income statement is a financial statement that shows profitability, total revenue and total expenses…

Q: Direct Energy has two options for upgrading a natural gas power station to meet new government…

A: To calculate NPV in case if the equipment is purchased we will have to calculate the present value…

Q: All of the following represents a cost -volume -profit relationship except : a. Profit = totalcon…

A: CVP analysis is the analysis which is more helpful in determining the effects of variation in the…

Q: Indicate the effects on gross profit the changes in volume, unit selling price, and unit cost. Write…

A: Selling price and sales volume have a direct relationship with the Gross profit i.e. increase in…

Q: The marginal cost of an asset is equivalent to its EUAC. True or False?

A: Marginal Cost of Asset means the cost required to run the asset for the next period. EUAC =…

Q: What will be the revenue generated at the break-even point?

A: Break even point is a point wherein the firm does not earn any profit nor incurs any loss.

Q: 1-The amount of money paid for the use of borrowed capital or from the money that has been loan.…

A: Entities and individuals usually borrow money to finance large projects or buy items like a house or…

Q: Break-even is the number of units at which? a. total revenue equals price times quantity b. total…

A: The break even sales are the sales where business earns no profit no loss during the period. The…

Q: 1. The value deducted from the revenue stream, which usually has no obligation toward covering…

A: Disclaimer: Since you have asked multiple questions we have answer first question please upload…

Q: Everything else remaining the same, an increase in fixed costs: I- increases the break-even point…

A: Financial breakeven point is that breakeven point, which is based out of net present value (NPV).…

Q: What concept relates to the proportionate savings in costs gained when levels of production are…

A: Lets understand the meaning of all the terms given in the question. Accounting profit is a terms…

Q: In the cost-volume- profit graph (above), what is represented by the point marked "A"?…

A: Introduction Cost volume profit (CVP) In CVP analysis if cost is equal to the sales then there is…

Q: 8) Using the equation method, Breakeven point is calculated as__________. Sales+ profit=variable…

A: Breakeven point is that level of sale of the business which covers the fixed cost but does not earn…

Q: In the cost-volume- profit graph (above), what is represented by the point marked "D"?…

A: Breakeven point is where revenue is equal to cost ,means fixed cost = contribution

Q: Santana Rey is considering the purchase of equipment for Business Solutions that would allow the…

A: Payback period and accounting rate of return are two capital budgeting approaches that helps in…

Question

100%

The data for a production time-based breakeven problem is in Table 4.6.
Lalculate the following items:
a) Shutdown breakeven point-units
b) Cost breakeven point-units
c) Required return breakeven point-units
d) Required return after taxes breakeven point
Table 4.6: Data for production time-based breakeven analysis
Item
$/Hour
Decimal
Sales Revenue
24,000
Production (Manufacturing) Costs
Fixed Costs
12
Variable Costs
6.
Semi-variable Costs
3.
4,000
Overhead Costs
12
Required Return (Profit)
Tax Rate (25%)
1,500
0.25
5.

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 1

Step 2 : Part a

Step 3 : Part b

Step 4 : Part c

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Which of the following is a disadvantage of the average rate of return method? a. fails to consider the time value of money b. includes the amount of income earned over the entire life of the proposal c. emphasizes accounting income d. difficult to use
“profit earned if operating capacity at the end of the period is greater than the operating capacity at the beginning of the period”, this definition of profit is in line with: Select one: a. none of above b. Purchasing power maintenance c. Financial capital maintenance d. Physical operating capital maintenance
1. To compute the breakeven point using the contribution margin, we get the ratio of a. Total fixed expenses and Total contribution margin b. Total variable expenses and Total Contribution margin c. Total fixed expenses and Contribution margin per unit d. Total variable expenses and Contribution margin per unit 2. A mathematical expression that describes a breakeven point of a company is a. Sales Revenue = Variable expenses + Fixed expenses b. Sales Revenue = Variable expenses - Fixed expenses c. Sales Revenue < Variable expenses + Fixed expenses d. Sales Revenue > Variable expenses - Fixed expenses 3. The Cost-Volume-Profit equation is given by a. Sales Revenue = Profits + Contribution margin ratio + Fixed expenses b. Sales Revenue = Profits + Contribution margin + Fixed expenses c. Sales Revenue = Profits+ Variable expenses + Fixed expenses d. Sales Revenue = Profits -Variable expenses…
Which of the following equations is correct for determining the required sales in units to generate a targeted amount of pre-tax income (πB) under the equation method (where Q = sales in units, F = total fixed costs, πB = pre-tax profit, v = variable cost per unit, and p = selling price per unit)?
Target profit is added to what other financial statement line item, or element, to determine the numerator in the overall target contribution margin (CM) calculation in break-even analysis? Variable costs Fixed costs Net income after taxes Operating profit
Your answer is incorrect. Divide the estimated average annual income by the average investment. Investment cost plus residual value, divided by two, equals average investment. Can you please redo it? Thanks
All of the following represents a cost-volume-profit relationship except: a. Total contribution margin + variable xpenses = variable expenses + fixed expenses profit b. Sales = totalexpe expenses + profit O cSales - variable senses + profit = fied expenses O d. Profit = totalcontri contribution margin- fixed expenses O e Sales - Variable expenses = fixed expenses + profit
Sales Variable costs Cost of goods sold Operating expenses Total variable Contribution margin Fixed costs Cost of goods sold Operating expenses Total fixed Net income (loss) Continue LA $ Eliminate LA Net Income Increase (Decrease)
1. Now change all of the dollar amounts in the data area of your worksheet so that it looks like this: 1 2 3 Data 4 Sales Variable costs: 5 67 00 8 A Chapter 1: Applying Excel 9 10 11 Cost of goods sold Variable selling Variable administrative Fixed costs: Fixed selling Fixed administrative $ $ $ $ $ $ B 32,000 16,000 1,600 1,400 2,500 1,500
3. Compute Project Y’s accounting rate of return. The numerator drop down options are: accounts receivable, annual income, average investment, average total assets, cost of goods sold, current assets, current liabilities, net sales, total assets The denominator dropdown options are: accounts receivable, annual income, average investment, average total assets,
As the level of activity increases, how will a mixed cost in total and per unit behave? A) B) (C) D) E) In Total Increase Increase Increase Decrease Decrease Multiple Choice Choice A Choice B Choice C Choice D Per Unit Decrease Increase No effect Increase No effect
At break even point: a) sales - contribution margin = net income or net loss b) sales - fixed expenses = variable expenses c) sales + variable expenses = contribution margin d) contribution margin + fixed expenses = net income

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS