c. If expected annual demand is 13,000 units, which alternative would yield the higher profit (or the lower loss)?Higher profit Problem 5-4 (Algo)A small firm intends to increase the capacity of a bottleneck operation by adding a new machine. Two alternatives, A and B. have beenidentified, and the associated costs and revenues have been estimated. Annual fixed costs would be $54,000 for A and $27,000 for B;variable costs per unit would be $9 for A and $11 for B; and revenue per unit would be $16.a. Determine each alternative's break-even point in units. (Round your answer to the nearest whole amount.)QBEPAQBEP,Bb. At what volume of output would the two alternatives yield the same profit (or loss)? (Round your answer to the nearest wholeamount.)QunitsunitsunitsA

Breakeven point is calculated by dividing the contribution margin with the amount of total fixed…

Answered: A small firm intends to increase the…

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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QRC Company is trying to decide which one of two alternatives it will accept. The costs and revenues associated with each alternative are listed below: Alternative A Alternative B Projected revenue $ 125,000 $ 150,000 Unit-level costs 25,000 36,000 Batch-level costs 12,500 24,000 Product-level costs 15,000 17,000 Facility-level costs 10,000 12,500 What is the differential revenue for this decision? Multiple Choice $50,000 $25,000 $125,000 $150,000
Currently, the unit selling price of a product is $350, the unit variable cost is $290, and the total fixed costs are $840,000. A proposal is being evaluated to increase the unit selling price to $390. a. Compute the current break-even sales (units). units b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant. units
Spruce Enterprises anticipates fixed costs of $25,000. Variable costs and expenses are expected to be 60% of sales. The president has asked you to develop a worksheet to calculate sales needed to break even and sales needed to achieve any desired net income (file name DESNI). Your worksheet should include a Data Section that contains fixed costs, desired net income, and variable costs as a percentage of sales. Assume as initial input for your model that the company wishes to achieve a net income of $10,000.
Stinnett Transmissions, Incorporated, has the following estimates for its new gear assembly project: Price = $ 1,250 per unit; variable cost = $470 per unit; fixed costs $4.98 million; quantity = 88,000 units. Suppose the company believes all of its estimates are accurate only to within \pm 21 percent. What values should the company use for the four variables given here when it performs its best-case and worst-case scenario analysis? Note: Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234, 567.
Urmila ben
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A newly formed company must decide on a plant location. There are two alternatives under consideration: locate near the major raw materials or locate near the major customers. Locating near the raw materials will result in lower fixed and variable costs than locating near the market, but the owners believe that there would be a loss in sales volume because customers tend to favour local suppliers. Revenue per unit will be $160 in either case. Annual fixed costs ($ millions) Variable cost per unit Expected annual demand (units) Near raw materials Near customers 1. Using the above given information, determine the profits for each alternative. (Negative answers should be indicated by a minus sign.) 64 2. Which location would produce greater profit? O Near raw materials O Near customers Near Raw Materials $0.90 $ 40 8,600 Near Customers $1.00 $ 45 13,300
Industrial Products, Inc. has two alternatives for manufacturing 11,500 industrial 100-horse power electric motors per year. If done in-house, fixed cost would be $2,200,000 with variable cost at $6,700 per unit. Alternative two is to outsource for a total cost of $8,000 per unit. What is the break-even quantity? Round your answer to the nearest whole number. motors Should the firm make-in-house or outsource? Round your answers to the nearest dollar. Total cost if done in-house: $ Total cost if outsourced: $ So, the firm can save $ by -Select- . Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
A manager must decide between two machines. The manager will take into account each machine's operating costs and initial costs, and its breakdown and repair times. Machine A has a projected average operating time of 131 hours and a projected average repair time of 4 hours. Projected times for machine B are an average operating time of 61 hours and a repair time of 5 hours. What are the projected availabilities of each machine? (Round your answers to 3 decimal places.) Answer is complete but not entirely correct. Availability 0.952 0.945 Machine A Machine B
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