It costs Sheridan Company $9 of variable costs and $5 of fixed costs to produce its product at full capacity. However, the companycurrently has unused capacity. The product sells for $17. Sunland Company offers to purchase 3420 units at $11 each. Sheridan willincur special shipping costs of $2.50 per unit. If the special offer is accepted and produced with unused capacity, net income willO increase $6840.O decrease $1710.O decrease $6840.O increase $1710.

Answered: Image /qna-images/answer/354b3154-9531-4be2-b8b2-bc9bc1f8b908.jpg

Answered: It costs Sheridan Company $9 of…

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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Steven and Son Inc. sells its car wash package for $180 per unit, its total variable costs per unit is $80 per unit, whereas the total fixed costs are $150,000. The company is considering the increase this year targeted profit to $250,000. What is the company's break even point in units? Select one: O a. To breakeven the company needs to produce 1,500 units O b. To breakeven the company needs to produce 1,875 units c. To breakeven the company needs to produce 2,500 units d. To breakeven the company needs to produce 833 units
Narchie sells a single product for $50. Variable costs are 70% of the selling price, and the company has fixed costs that amount to $374,400. Current sales total 20,000 units.If Narchie sells 28,000 units, its safety margin will be: A. $374,400. B. None of the answers is correct. C. $1,400,000. D. $152,000. E. $1,248,000.
McDonald Inc. sells two products: a regular and a deluxe version. The owner, lain, would like to better understand the impact of the sales mix on the company's sales. The following information is available: Sales price per unit Variable cost per unit Regular $45 $27 Deluxe $80 $32 The company has total fixed costs of $540,000 for the year and they sell 3 Regular products for every 2 Deluxe products. lain would like to know, given the sales mix, how many units of each product the company must sell per year to break even. The company must sell www units of the Regular product. Enter the number of units given the current sales mix. units of the Deluxe product. The company must sell Enter the number of units given the current sales mix.
Charleston Affair currently makes the King Component, incurring variable costs of $18 per unit and fixed costs of $4 per unit. The company has the option to purchase the component for $20 per unit. Prepare a differential analysis to determine if the company should make (Alternative 1) or buy (Alternative 2) the King Component. Assume that the fixed costs will be incurred in each situation up to 40,000 units. Determine at what want point of sales does it make sense to produce rather than buy)
Crane Industries incurs unit costs of $6 ($4 variable and $2 fixed) in making an assembly part for its finished product. A supplier offers to make 13,500 of the assembly part at $5 per unit. If the offer is accepted, Crane will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, that Crane will realize by buying the part. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Variable manufacturing costs Fixed manufacturing costs Purchase price Total annual cost The decision should be to $ Make the part $ Buy $ $ Net Income Increase (Decrease)
Forest Company sells a product for $100 per unit. The variable cost is $50 per unit, and fixed costs are $200,000. Determine (a) the break-even point in sales units and (b) the sales units required for the company to achieve a target profit of $66,000.a. Break-even point in sales units fill in the blank 1 of 2 unitsb. Break-even point in sales units required for the company to achieve a target profit of $66,000 fill in the blank 2 of 2 units
A product sells for $30 per unit and has variable costs of $18.00 per unit. The fixed costs are $960,000. If the variable costs per unit were to decrease to $16.50 per unit, fixed costs increase to $1,080,000, and the selling price does not change, break-even point in units would: Multiple Choice O O Equal 6,000. Increase by 24,828. Not change. Increase by 4,000. Decrease by 24,828.
Charlevoix Cases makes mobile phone cases. The company has collected the following price and cost characteristics: Sales price $ 12.00 per case Variable costs 5.50 per case Fixed costs 403,000 per year Assume that the company plans to sell 77,000 units annually. Consider requirements (b), (c), and (d) independently of each other. Required: What will be the operating profit? What is the impact on operating profit if the sales price decreases by 20 percent? Increases by 10 percent? Note: Do not round intermediate calculations. What is the impact on operating profit if variable costs per unit decrease by 20 percent? Increase by 10 percent? Note: Do not round intermediate calculations. Suppose that fixed costs for the year are 20 percent lower than projected and variable costs per unit are 20 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? Note: Do not round intermediate…
Wok of Fame, Inc., makes and sells woks at a price of $5.00 per unit. Variable cost is $3.00 per unit. The company's total fixed costs are $52,500. How much must total sales be if Wok of Fame wants to earn an operating income of $17,500? $100,000 $70,000 $175,000 $17,500 $26,250
Trailblazer Company sells a product for $270 per unit. The variable cost is $110 per unit, and fixed costs are $1,056,000. Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of $190,080. a. Break-even point in sales units fill in the blank 1 units b. Break-even point in sales units if the company desires a target profit of $190,080 fill in the blank 2 units

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