PE 3. One of the products produced by Kool Company isTanglad Tea. The selling price per 18-ml. bottle is P4.50, andvariable cost of production is P2.70. Total fixed costs per yearare P315,000. The company is currently selling 200,000 18-ml. bottle per year.3. If Kool Company can increase sales in units by 30 percent,what percentage increase will it experience in income?4. If the company increases advertising by P41,200, sales inunits will increase by 15%. What will be the newbreakeven point?

Breakeven Point is the where the contribution margin and fixed cost are equal. When the sales in…

Answered: of production is P2.70. Total 0. The…

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Accounting

of production is P2.70. Total 0. The company is currently se

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 47E: Klamath Company produces a single product. The projected income statement for the coming year is as...

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PAGE 1.1 NUBD Co. plans to market a new product. Based on its market studies. It estimates that it can sell 70,000 units in 2021. The selling price per unit is P2.00. Variable cost ratio is 40% of sales. Fixed costs are estimated to be P60,000. A.Compute the break-even point in units. B.Compute the break-even point in sales pesos.
Question 3.2 Using information from the attached picture: Calculate the selling price per unit that will realize an operating profit of R720000. The number of units that must be sold in order to earn an operating profit of R720000, if the selling price increases by 10% and fixed costs increase by R87000.
Sundial, Inc., produces two models of sunglasses-AU and NZ. the sunglasses have the following characteristics. Au NZ Selling price per unit $ 160 $ 160 Variable cost per unit $ 80 $ 60 Expected units sold per year 70,000 30,000 The total fixed costs per year for the company are $3,612,000. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix is the same at the break-even point, compute the break-even point. c. If the product sales mix were to change to four pairs of UA sunglasses for each pair of NZ sunglasses, what would be the new break-even volume for Sundial, Inc? Complete the question by entering your answers in the tabs below. Required A What is the…
A6) Finance XYZ is a retailer and sells 179,000 units per year. It purchases from a single supplier. Fixed costs per order are $868 and carrying cost is $11 per unit. How many units should XYZ purchase per order? That is, what is the Economic Order Quantity? Enter your answer rounded off to two decimal points. Margin for error: +/- 1
Question 3: Oman Company's financial information is given in the table below. Year Sales (OMR) Fixed Costs 445000 Variable Costs : 2020 105000 245000 2021 500000 150000 280000 You are required to calculate the following values for each year. The years are independent of each other. a) P/V ratio, b) В.Е.P. c) Sales required to earn a profit of OMR 45000. d) Margin of safety at a profit of OMR 50000 e) Profit when sales are OMR. 300000.
PROBLEM 3: The company expected to sell 45,000 units next year with the following results: Sales P900,000 Variable costs 540,000 360,000 150,000 210,000 84,000 P126,000 Contribution margin Fixed costs Income before taxes Income taxes Net income a. If the company wants an after-tax return on sales of 15% on its expected volume of 45,000 units, what price must it charge? a. 19.66 b. 20.44 c. 20.22 d. 22.22
2.2 Use the information provided below to calculate the following: INFORMATION Monthly sales of West Ham Limited is 4 400 units at R150 a unit. The purchase price is R90 per unit. The carrying cost amounts to 10% of the purchase price and the ordering cost is R62 per order. INFORMATION Monthly sales of West Ham Limited is 4 400 units at R150 a unit. The purchase price is R90 per unit. The carrying cost amounts to 10% of the purchase price and the ordering cost is R62 per order. 2.2.1 Calculate the Economic order quantity (EOQ) 2.2.2 Calculate the Number of orders that need to be placed for the year
PROBLEM 4. Cindy, Inc., sells a single product. The company's most recent income statement is given below. Sales (10,000 units) Less variable expenses Contribution margin Less fixed expenses P800,000 ( 440,000) 360,000 (180.000) P180,000 Operating income Requirements: 1. If 2,000 more units are sold, how much increase in profit is expected? 2. If sales volume increases by15 percent compute the new profit. 3. If the firm were able to increase its sales volume by 15 percent without a change in its selling price, variable costs, or fixed costs, would this change the breakeven point?
2.6 The Charleston Company has fixed costs of Birr 20,000 per month, and variable costs of Birr 15 per unit of output. The company would like to earn profits of Birr 4,000 per month. At a sales volume of 12,000 units per month, what sales price per unit would the company have to charge in order to achieve its targeted monthly profit?
Q.20..
A company manufactures and sells a single product whose selling price is P500 and whose variable expense is P300 per unit. The company’s monthly fixed expense is P120,000. Required:1. Solve for the unit sales that are required to earn a target profit of P80,000. 2. If the company wants to earn a profit of P200,000, how much should be the sales revenue?
PROBLEM 3. The income statement of Sandra Company follows: Sales Less Variable expenses Contribution margin Less Fixed costs P500,000 (275.000) 225,000 (180,000) P 45,000 Operating income Sandra produces and sells a single product. The above income statement is based on sales of 100,000 units. Requirements: 1. Compute the breakeven point in units and in pesos. 2. Suppose that the selling price increases by 10 percent. Will the breakeven increase or decrease? 3. Suppose that the variable cost per unit increases by P0.35. What will happen to breakeven point? Can you predict whether the breakeven increases or decreases if both the selling price and the unit variable cost increase? Recompute the breakeven point by incorporating both the changes in requirement 2 and 3. 5. Assume that total fixed costs increase by P50,000. Will the breakeven point change? 4.