provide correct solution. Tag. General Account. If fixed costs are $450,000, the unit selling price is $75, and the unitvariable costs are $50, what are the old and new break-even sales (units) ifthe unit selling price increases by $10? a. 6,000 units and 5,294 units b.18,000 units and 6,000 units c. 18,000 units and 12,858 units d. 9,000units and 15,000 units

To calculate the old and new break-even sales (in units), we use the break-even formula: Break-Even…

Answered: If fixed costs are $450,000, the unit…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section14.A: Breakeven Analysis

Problem 7P

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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?
Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22 each in the coming year. Total variable costs equal 1,086,800. Total fixed costs equal 8,000,000. (Round all ratios to four significant digits, and round all dollar amounts to the nearest dollar.) Required: 1. What is the contribution margin per unit? What is the contribution margin ratio? 2. Calculate the sales revenue needed to break even. 3. Calculate the sales revenue needed to achieve a target profit of 245,000. 4. What if the average price per unit increased to 23.50? Recalculate: a. Contribution margin per unit b. Contribution margin ratio (rounded to four decimal places) c. Sales revenue needed to break even d. Sales revenue needed to achieve a target profit of 245,000
If a company has fixed costs of $6.000 per month and their product that sells for $200 has a contribution margin ratio of 30%, how many units must they sell in order to break even? A. 100 B. 180 C. 200 D. 2,000
Klamath Company produces a single product. The projected income statement for the coming year is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. 2. Suppose 10,000 units are sold above break-even. What is the operating income? 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. (Note: Round the contribution margin ratio to four decimal places, and round the sales revenue to the nearest dollar.) Suppose that revenues are 200,000 more than expected for the coming year. What would the total operating income be?
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?
A company sells its products for $80 per unit and has per-unit variable costs of $30. What is the contribution margin per unit? A. $30 B. $50 C. $80 D. $110
If fixed costs are $345,000, the unit selling price is $75, and the unit variable costs are $49, what are the old and new break-even sales in units (rounded to a whole number) if the unit selling price increases by $5? a.4,600 units and 13,269 units b.7,041 units and 10,629 units c.13,269 units and 11,129 units d.13,269 units and 4,600 units
If fixed costs are $300,000, the unit selling price is $25, and the unit variable costs are $20, what is the break-even sales (units) if the variable costs are decreased by $2? A. 42,857 units B. 17,143 units C. 60,000 units D. 100,000 units
If fixed costs are $1,450,000, the unit selling price is $205, and the unit variable costs are $128, what are the break-even sales (units) if fixed costs are increased by $30,300? a. 28,837 units b. 23,070 units c. 19,225 units d. 15,380 units
If fixed costs are $260,000, the unit selling price is $74, and the unit variable costs are $55, the old and new break-even sales (units), respectively, if the unit selling price increases by $7 are a.13,684 units and 10,000 units b.3,514 units and 13,684 units c.13,684 units and 3,514 units d.4,727 units and 9,500 units
If fixed costs are $276,000, the unit selling price is $117, and the unit variable costs are $76, what is the break-even sales (units)? a. 6,732 units b. 1,430 units c. 2,359 units d. 3,632 units If fixed costs are $737,000 and variable costs are 63% of sales, what is the break-even point in sales dollars? a. $2,728,892 b. $1,991,892 c. $1,201,310 d. $464,310
If fixed costs are $295,000, the unit selling price is $72, and the unit variable costs are $54, the old and new break-even sales (units), respectively, if the unit selling price increases by $4 are a. 16,389 units and 4,097 units b. 5,463 units and 12,909 units C. 4,097 units and 16,389 units d. 16,389 units and 13,409 units

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