If a company reduces their fixed costs from $219,000 to $158,000 when the selling price of$35 per unit and the variable costs of $34 per unit remain the same, how many units dothey need to sell to generate the same operating income (round to the nearest wholenumber)?

Cost volume profit analysis is the technique used by management for decision making. The methods…

Answered: If a company reduces their fixed costs…

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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Frank Corporation has a single product. Its selling price is $80 and the variable costs are $30. The company’s fixed expenses are $5,000. What is the company’s break-even point in unit sales?
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Given the following information, answer thequestions:• The ratio of variable cost per unit divided by selling price per unit equals 0.3.• Fixed costs amount to $60,000.(a) Draw the cost-volume-profit chart.(b) What is the break-even point?(c) What effect would an 8% decrease in sellingprice have on the break-even point from part (b)?
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what is the Revenue, cost and profit functions for the problem below? Orange Company buys Product A for P15 per units and sells them for P25 per unit. There areno other variable costs. Fixed cost is P6,000. Use the breakeven formula to determine thefollowing:a. Revenue, cost and profit functions.
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If a company reduces their fixed costs from $219,000 to $158,000 when the selling price of $35 per unit and the variable costs of $34 per unit remain the same, how many units do they need to sell to generate the same operating income (round to the nearest whole number)?