?? During FY 2020,DorchesterCompany plans to sell Widgets for$14 a unit. Current variable costs are$6 a unit and fixed costs are expectedto total $146,000. Use thisinformation to determine the dollarvalue of sales for Dorchester to breakeven. (Round to the nearest wholedollar.)

Explanation of Break-even Sales (in Dollars):Break-even sales represent the total sales revenue…

Answered: During FY 2020, Dorchester Company…

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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In 2020, National Co. sold 1,000 units at P500 each, and earned net income of P40,000. Variable expenses were P300 per unit, and fixed expenses were P160,000. The same selling price is expected for 2021. National Co.’s variable cost per unit will rise by 10% in 2021 due to increasing material costs, so they are tentatively planning to cut fixed costs by P10,000. How many units must National Co. sell in 2021 to maintain the same income level as 2020?
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Grove Audio is considering the introduction of a new model of wireless speakers with the following price and cost characteristics. Sales price $ 430 per unit Variable costs 190 per unit Fixed costs 624,000 per year Assume that the projected number of units sold for the year is 3,750. Consider requirements (b), (c), and (d) independently of each other. Required: What will the operating profit be? What is the impact on operating profit if the sales price decreases by 20 percent? Increases by 10 percent? What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? Suppose that fixed costs for the year are 20 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much?
The Falling Snow Company is considering production of a lighted world globe that the company would price at a markup of 0.30 above full cost. Management estimates that the variable cost of the globe will be $62 per unit and fixed costs per year will be $240,000. Assuming sales of 1,200 units, what is the full selling price of a globe with a 0.30 markup? Round to two decimal places.
Grove Audio is considering the introduction of a new model of wireless speakers with the following price and cost characteristics. Sales price $ 438.00 per unit Variable costs 198.00 per unit Fixed costs 680,000 per year Assume that the projected number of units sold for the year is 4,150. Consider requirements (b), (c), and (d) independently of each other. Required: What will the operating profit be? What is the impact on operating profit if the sales price decreases by 20 percent? Increases by 10 percent? What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? Suppose that fixed costs for the year are 20 percent lower than projected, and variable costs per unit are 10 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much? omplete this question by entering your answers in the tabs below. Required A Required B…
Find units?
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Shiela Co. is expecting an increase in fixed costs by P78,750 upon moving their place of business to the downtown area. Likewise it is anticipating that the selling price per unit and the variable expenses will not change. At present, the sales volume necessary to breakeven is P750,000 but the expected increase in fixed costs, the sales volume necessary to breakeven will go up to P975,000. Based on these predictions, what would be the required peso sales to earn P35,000 in the coming year?
(Break-even point and selling price) Specialty Steel, Inc. will manufacture and sell 230,000 units next year. Fixed costs will total $320,000, and variable costs will be 50 percent of sales. a. The firm wants to achieve a level of earnings before interest and taxes of $270,000. What selling price per unit is necessary to achieve this result? b. Set up a pro forma income statement to verify your solution to part a. a. What selling price per unit is necessary to achieve a level of earnings before interest and taxes of $270,000? (Round to three decimal places.)
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During FY 2020, Dorchester Company plans to sell Widgets for $14 a unit. Current variable costs are $6 a unit and fixed costs are expected to total $146,000. Use this information to determine the dollar value of sales for Dorchester to break even. (Round to the nearest whole dollar.)