For the coming year, River Company estimates fixed costs at $109,000, the unit variable cost at $21, and the unit selling price at $85. Determine the following: If required, round to the nearest whole unit and round interim calculations to one decimal place. Required: a.  The break-even point in units of sales. fill in the blank 1 units b.  The unit sales required to realize operating income of $150,000. fill in the blank 2 units c.  The probable operating income if sales total $500,000. $fill in the blank 3

Q: For the coming year, Belton Company estimates fixed costs of $60,000, the unit variable cost of $25,…

A: As per the guidelines, only one question is allowed to be answered. Please resubmit the remaining…

Q: c. anticipates fixed costs of $600,000, a unit variable cost of $75, and a unit selling price of…

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Q: Harrison Co. expects to sell 200,000 units of its product next year, which would generate total…

A:

Cost-Volume-Profit Analysis

Cost Volume Profit (CVP) analysis is a cost accounting method that analyses the effect of fluctuating cost and volume on the operating profit. Also known as break-even analysis, CVP determines the break-even point for varying volumes of sales and cost structures. This information helps the managers make economic decisions on a short-term basis. CVP analysis is based on many assumptions. Sales price, variable costs, and fixed costs per unit are assumed to be constant. The analysis also assumes that all units produced are sold and costs get impacted due to changes in activities. All costs incurred by the company like administrative, manufacturing, and selling costs are identified as either fixed or variable. 

Marginal Costing

Marginal cost is defined as the change in the total cost which takes place when one additional unit of a product is manufactured. The marginal cost is influenced only by the variations which generally occur in the variable costs because the fixed costs remain the same irrespective of the output produced. The concept of marginal cost is used for product pricing when the customers want the lowest possible price for a certain number of orders. There is no accounting entry for marginal cost and it is only used by the management for taking effective decisions.