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Consider the following information:   ITEM SALES(Units) SALES VARIABLE COST A           9000          $54000      5.95 B           12000        60000         3.75 C           15000         60000         3.50 D           25000         75000        1.75 Costs of the period are as follows (salaries $45000, rent $10000, depreciation $8000, furniture and computers $24000, raw materials $ 120,000, insurance $5000, periodic maintenance $4000, interest expense $3000, utilities (fixed) $4000, property tax $3000, advertising $9000 (set at the beginning of the year), and new cars $62000). What is the breakeven point for all items? How many units of item A, B, C, & D are needed to breakeven? Calculate the profit of item A.

Consider the following information:   ITEM SALES(Units) SALES VARIABLE COST A           9000          $54000      5.95 B           12000        60000         3.75 C           15000         60000         3.50 D           25000         75000        1.75 Costs of the period are as follows (salaries $45000, rent $10000, depreciation $8000, furniture and computers $24000, raw materials $ 120,000, insurance $5000, periodic maintenance $4000, interest expense $3000, utilities (fixed) $4000, property tax $3000, advertising $9000 (set at the beginning of the year), and new cars $62000). What is the breakeven point for all items? How many units of item A, B, C, & D are needed to breakeven? Calculate the profit of item A.

FINANCIAL ACCOUNTING
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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. Consider the following information:

 

ITEM SALES(Units) SALES VARIABLE COST

A           9000          $54000      5.95

B           12000        60000         3.75

C           15000         60000         3.50

D           25000         75000        1.75

Costs of the period are as follows (salaries $45000, rent $10000, depreciation $8000, furniture and computers $24000, raw materials $ 120,000, insurance $5000, periodic maintenance $4000, interest expense $3000, utilities (fixed) $4000, property tax $3000, advertising $9000 (set at the beginning of the year), and new cars $62000).

  1. What is the breakeven point for all items?
  2. How many units of item A, B, C, & D are needed to breakeven?
  3. Calculate the profit of item A.
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