need help this questions Everest Industries produces a product that has a variable cost of $8 per unit. The company'sfixed costs are $45,000. The product sells for $14 per unit, and the company desires to earna $25,000 profit.Required:1. Determine the contribution margin per unit.2. Compute the volume of sales in units required to achieve the target profit.

Step 1: Definition of Contribution Margin and Target Sales VolumeContribution Margin (CM) per unit…

Answered: Everest Industries produces a product…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 7PA: Manatoah Manufacturing produces 3 models of window air conditioners: model 101, model 201, and model...

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Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals 146,000. Each door handle sells for 12 and has variable cost of 9; each trim kit sells for 8 and has variable cost of 5. Required: 1. What are the contribution margin per unit and the contribution margin ratio for door handles and for trim kits? 2. If Polaris sells 20,000 door handles and 40,000 trim kits, what is the operating income? 3. How many door handles and how many trim kits must be sold for Polaris to break even? 4. CONCEPTUAL CONNECTION Assume that Polaris has the opportunity to rearrange its plant to produce only trim kits. If this is done, fixed costs will decrease by 35,000, and 70,000 trim kits can be produced and sold. Is this a good idea? Explain.
Suppose that a company has fixed costs of $11 per unit and variable costs $6 per unit when 11,000 units are produced. What are the fixed costs per unit when 20,000 units are produced?
Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is 6. Total fixed cost is 10,000. Required: 1. Prepare a CVP graph with Units Sold as the horizontal axis and Dollars as the vertical axis. Label the break-even point on the horizontal axis. 2. Prepare CVP graphs for each of the following independent scenarios: (a) Fixed cost increases by 5,000, (b) Unit variable cost increases to 7, (c) Unit selling price increases to 12, and (d) Fixed cost increases by 5,000 and unit variable cost is 7.
A company produces a product with variable costs of $2.50 per unit. The product sells for $5.00 per unit. The company has fixed costs of $3,000 and desires a target income of $10,000. The sales level in dollars to achieve the desired target income is $
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Dove, Inc. produces a product that has a variable cost of $6.00 per unit. The company's fixed costs are $60,000. The product is sold for $9.00 per unit and the company desires to earn a target profit of $30,000. What is the amount of sales that will be necessary to earn the desired profit?
Craylon Manufacturing Company produces two products, X and Y. The following information is presented for both products: X Y Selling price per unit $40 $25 Variable cost per unit 25 15 Total fixed costs are $275,000.Required:a. Calculate the contribution margin for each product.b. Calculate breakeven point in units of both X and Y if the sales mix is 3 units of X for every unit of Y.c. Calculate breakeven volume in total dollars if the sales mix is 2 units of X for every 3 units of Y.
RST Company produces a product that has a variable cost of $6 per unit. The company's fixed costs are $30,000. The product sells for $10 per unit. RST desires to earn a target income of $20,000. The sales level in units to achieve the desired target income is
Madlock, Inc. sells a product with a contribution margin of $10 per unit. Fixed costs are $1,800 per month. How many units must Madlock sell to break even? Begin by showing the formula and then entering the amounts to calculate the units Madlock must sell to break even. (Abbreviation used: CM = contribution margin. Complete all input fields. Enter a "0" for items with a zero value.) Target profit ) = Fixed costs ▼ + + HH CM per unit TOD Carmen Required sales in units
Sharp Company makes and sells pencil sharpeners. The variable cost of each sharpener is $20. The sharpeners are sold for $30 each. Fixed operating expenses amount to $40,000. a. Determine the break-even point in units and sales dollars. b-1. Determine the sales volume in units and dollars that is required to attain a profit of $12,000. b-2. Prepare an income statement using the contribution margin format to verify your answer. c. Determine the margin of safety between sales required to attain a profit of $12,000 and break-even sales.
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