Workings are mandatory for upvote. Covid2020 Furniture is operating at almost 100% capacity. The company expects sales to increaseby 20% in 2020. To satisfy the demand for its products, the company is considering twoalternatives:O The first alternative would increase fixed costs by 15% but not affect variable costs.O The second alternative would not affect fixed costs but increase variable costs to 60% ofthe selling price of the company's product.Covid2020 Furniture's income statement for 2019 is as follows:Sales RM1,800,000Costs:Variable RM810,000Fixed RM165,000 RM975,000Income before taxes RM825,000Calculate Break even sales value?

Break even point (Sales) = Fixed Cost/ PV ratio PV Ratio = Contribution/ Sales Contribution = Sales…

Answered: Covid2020 Furniture is operating at…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section14.A: Breakeven Analysis

Problem 4P

See similar textbooks

Similar questions

Dalen Company prepared the following preliminary forecast concerning Product D for 2019 assuming no expenditure for advertising (refer to the attached picture): Based on a market study, Dalen estimates that it could increase the unit selling price by 15% and increase the unit sales volume by 10% if P100,000 was spent in advertising. Assuming that Dalen incorporates these changes in its 2019 forecast, what should be the operating income for Product D? selling price per unit 10 unit sales 100000 variable cost 600000 fixed cost 300000
Karina Company prepared the following preliminary forecast concerning product Jungling Boot for 2021 assuming no expenditure for advertising: Selling price per unit P10 100,000 Unit sales Variable cost Fixed Cost P600,000 P300,000 Based on the market study in December 2020, Karina estimated that it could increase the unit selling price by 15% and increase the unit sales volume by 10% if P100,000 were spent on advertising. Assuming that Wilson incorporates these changes in its 2021 forecast, what should be the operating income for Product Jungling Boot? P205,000 P175,000 P190,000 ) P365,000 2
Cullumber Bucket Co., a manufacturer of rain barrels, had the following data for 2019. Sales 2,990 units Sales price $40 per unit Variable costs $20 per unit Fixed costs $35,880 If the company wishes to increase its total dollar contribution margin by 30% in 2020, by how much will it need to increase its sales if selling price per unit, variable price per unit and total fixed costs remain constant? Total increase in sales required:
Answer what is being asked. Show your computation on the space provided. 1. Roxas company sold 23,430 units of product A in 2020 which 10% compared to the units sold in 2019. The products were sold at P300 per unit. Because of heavy advertising and other promotional activities and shift in buyer's preferences, the company expect to increase the sales by 15% in 2021 against the 2020 performance. The company plans to sell the product at P350 per unit. Required: Prepare the sales budget Sales Budget 2021 Estimated Price Selling Units Sales Projected Sales
The company is planning to use a new material throughout 2023. This will reduce variable costs by 10%. Fixed costs are expected to remain unchanged. As the factory's output is nearing its annual output capacity of 38,000 units, the company plans to increase the selling price by 5%. This will decrease sales volume by 20%. Use cost-volume-profit analysis to determine whether the company should proceed with the plan.
An industry is going to launch a new product in the market in the year 2018. The data pertaining to the costs and the estimated sales is provided as follows 1. Fixed cost for the year 2018-2019 is 20000$. 2. The variable cost per unit is 12$. 3. The estimated sales are 800000$. 4. If each unit is sold at 30$. Find out 1. Break-even point. 2. The profit at a turn-over of 25000 units. 3. Margin of safety in terms of units and sales. 4. If a profit target is 1200000$, compute the turn over required. 5. Also construct the break-even chart and show the details on it.
In 2019, Bonita sold 1000 units at $500 each, and earned net income of $40000. Variable expenses were $200 per unit, and fixed expenses were $220000. The same selling price is expected for 2020. Bonita’s variable cost per unit will rise by 10% in 2020 due to increasing material costs, so they are tentatively planning to cut fixed costs by $10000. How many units must Bonita sell in 2020 to maintain the same income level as 2019? A. 806 B. 893 C. 1000 D. 926
In 2019, Papa Company provided the following data: Sales price per unit P100; Variable cost per unit P60; Total fixed cost at P1,500,000. For 2020, Papa Company is planning to buy a machine that will reduce the production workers and cut the sales price of the product at the same time. The new machine will increase the fixed cost by P500,000 due to depreciation; variable cost per unit will decrease by 25% due to reduction of direct workers; and the sales price will be reduced by 10%. What is the profit (before tax) if the company produces and sells 45,000 units in 2020?* 27,000 25,000 O 28,000 26,000
In 2019, Papa Company provided the following data: Sales price per unit P100; Variable cost per unit P60; Total fixed cost at P1,500,000. For 2020, Papa Company is planning to buy a machine that will reduce the production workers and cut the sales price of the product at the same time. The new machine will increase the fixed cost by P500,000 due to depreciation; variable cost per unit will decrease by 25% due to reduction of direct workers; and the sales price will be reduced by 10%. What is the break-even units in 2020? * 45,000 O 44,444 O 37.500 O 50,000
In 2019, Reyes Company provided the following data: Sales price per unit P100; Variable cost per unit P60; Total fixed cost at P1,500,000. For 2020, Papa Company is planning to buy a machine that will reduce the production workers and cut the sales price of the product at the same time. The new machine will increase the fixed cost by P500,000 due to depreciation; variable cost per unit will decrease by 25% due to reduction of direct workers; and the sales price will be reduced by 10%. What is the profit (before tax) if the company produces and sells 45,000 units in 2020? a.28,000 b.25,000 c.27,000 d.26,000 What is the break-even units in 2020? a.37.500 b.50,000 c.44,444 d.45,000 What is the profit if the company operates at 45,000-unit volume? a.P600,000 b.P300,000 c.P 45,000 d.None of the above
In 2019, Vaughn sold 3000 units at $500 each. Variable expenses were $250 per unit, and fixed expenses were $490000. The same selling price is expected for 2020. Vaughn is tentatively planning to invest in equipment that would increase fixed costs by 20%, while decreasing variable costs per unit by 20%. What is Vaughn’s break-even point in units for 2020? 2450. 2352. 2940. 1960.
Company produces and sells X and Y. In 2020, 10,000 units of X were sold at P10 per unit with contribution margin P4 per unit and 15,000 units of Y were sold at P12 per unit with contribution margin P5 per unit. Total fixed cost is P100,000. In 2021, which of the following will result to higher net profit? 5% decrease in unit selling prices accompanied by 5% increase in sales volume 5% increase in unit selling prices 10% increase in unit selling prices and unit variable costs 10% increase in unit selling prices accompanied by 10% decrease in sales volume.

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Entrepreneurial Finance

Finance

ISBN:

9781337635653

Author:

Leach

Publisher:

Cengage

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Entrepreneurial Finance

Finance

ISBN:

9781337635653

Author:

Leach

Publisher:

Cengage

Principles of Cost Accounting

Accounting

ISBN:

9781305087408

Author:

Edward J. Vanderbeck, Maria R. Mitchell

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS