It is the end of 2020. Evergreen All - Fixed Corporation began operations in January 2019. The company is so named because it has no variable costs. All its costs are fixed; they do not vary with output. Evergreen All - Fixed Corp. is located on the bank of a river and has its own hydroelectric plant to supply power, light, and heat. The company manufactures a synthetic fertilizer from air and river water and sells its product at a price that is not expected to change. It has a small staff of employees, all paid fixed annual salaries. The output of the plant can be increased or decreased by pressing a few buttons on a keyboard. The following budgeted and actual data are for the operations of Evergreen All - Fixed. ... Now calculate the breakeven point under (b) absorption costing. Enter the formula labels and amounts needed to calculate the absorption costing breakeven sales. (Assume "P" is the production level in units. Abbreviations used: MOH = manufacturing overhead, CM = contribution margin.) Total fixed costs + [ Fixed manuf. OH rate ✗( Breakeven sales-units Units produced )] = Revenue 4050000 + [ × ( 32400 P )] = (Round your answer up to the nearest unit.) The breakeven point under absorption costing when sales are tons is units.
It is the end of 2020. Evergreen All - Fixed Corporation began operations in January 2019. The company is so named because it has no variable costs. All its costs are fixed; they do not vary with output. Evergreen All - Fixed Corp. is located on the bank of a river and has its own hydroelectric plant to supply power, light, and heat. The company manufactures a synthetic fertilizer from air and river water and sells its product at a price that is not expected to change. It has a small staff of employees, all paid fixed annual salaries. The output of the plant can be increased or decreased by pressing a few buttons on a keyboard. The following budgeted and actual data are for the operations of Evergreen All - Fixed. ... Now calculate the breakeven point under (b) absorption costing. Enter the formula labels and amounts needed to calculate the absorption costing breakeven sales. (Assume "P" is the production level in units. Abbreviations used: MOH = manufacturing overhead, CM = contribution margin.) Total fixed costs + [ Fixed manuf. OH rate ✗( Breakeven sales-units Units produced )] = Revenue 4050000 + [ × ( 32400 P )] = (Round your answer up to the nearest unit.) The breakeven point under absorption costing when sales are tons is units.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![It is the end of 2020. Evergreen All - Fixed Corporation began operations in January 2019. The company is so named
because it has no variable costs. All its costs are fixed; they do not vary with output. Evergreen All - Fixed Corp. is
located on the bank of a river and has its own hydroelectric plant to supply power, light, and heat. The company
manufactures a synthetic fertilizer from air and river water and sells its product at a price that is not expected to change.
It has a small staff of employees, all paid fixed annual salaries. The output of the plant can be increased or decreased
by pressing a few buttons on a keyboard. The following budgeted and actual data are for the operations of
Evergreen All - Fixed.
...
Now calculate the breakeven point under (b) absorption costing. Enter the formula labels and amounts needed to
calculate the absorption costing breakeven sales. (Assume "P" is the production level in units. Abbreviations used:
MOH = manufacturing overhead, CM = contribution margin.)
Total fixed costs
+ [
Fixed manuf. OH
rate
☑( Breakeven sales-units
Units produced
)] = Revenue
4050000
+ [
✗(
32400
P
)] =
(Round your answer up to the nearest unit.)
The breakeven point under absorption costing when sales are
tons is
units.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb83c5403-7cfa-4dff-87a1-418932fae0af%2F92e62bb8-ee8f-4b68-abd3-28ce324116e5%2Fjq6hs0e_processed.png&w=3840&q=75)
Transcribed Image Text:It is the end of 2020. Evergreen All - Fixed Corporation began operations in January 2019. The company is so named
because it has no variable costs. All its costs are fixed; they do not vary with output. Evergreen All - Fixed Corp. is
located on the bank of a river and has its own hydroelectric plant to supply power, light, and heat. The company
manufactures a synthetic fertilizer from air and river water and sells its product at a price that is not expected to change.
It has a small staff of employees, all paid fixed annual salaries. The output of the plant can be increased or decreased
by pressing a few buttons on a keyboard. The following budgeted and actual data are for the operations of
Evergreen All - Fixed.
...
Now calculate the breakeven point under (b) absorption costing. Enter the formula labels and amounts needed to
calculate the absorption costing breakeven sales. (Assume "P" is the production level in units. Abbreviations used:
MOH = manufacturing overhead, CM = contribution margin.)
Total fixed costs
+ [
Fixed manuf. OH
rate
☑( Breakeven sales-units
Units produced
)] = Revenue
4050000
+ [
✗(
32400
P
)] =
(Round your answer up to the nearest unit.)
The breakeven point under absorption costing when sales are
tons is
units.
Transcribed Image Text:Data table
-
The company uses budgeted production as the denominator level and
writes off any production-volume variance to cost of goods sold.
Sales
Production
Selling price
Costs (all fixed):
Manufacturing
2019
27,000 tons
54,000 tons
2020a
27,000 tons
0 tons
$125 per ton
$125 per ton
Х
$2,700,000
$2,700,000
$103,000
Operating (nonmanufacturing) $103,000
a Management adopted the policy, effective January 1, 2020, of
producing only as much product as needed to fill sales orders. During
2020, sales were the same as for 2019 and were filled entirely from
inventor, at the start of 2020
Print
Done
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