Operating Income of $220,000 in 2019, when production was 3,000 units Variable expenses per unit: Direct Material $58 Direct Labour $74 Variable Manufacturing Overhead $48 Fixed expenses: Fixed Manufacturing Overhead $215,000 Fixed Selling Costs $65,000 Fixed Administrative Costs $160,000 Briefly explain the impact of each of the following scenarios on the break-even point and the margin of safety: Increase in sales volume Increase in total fixed costs Increase in selling price per unit Decrease in variable costs per unit
Operating Income of $220,000 in 2019, when production was 3,000 units Variable expenses per unit: Direct Material $58 Direct Labour $74 Variable Manufacturing Overhead $48 Fixed expenses: Fixed Manufacturing Overhead $215,000 Fixed Selling Costs $65,000 Fixed Administrative Costs $160,000 Briefly explain the impact of each of the following scenarios on the break-even point and the margin of safety: Increase in sales volume Increase in total fixed costs Increase in selling price per unit Decrease in variable costs per unit
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter6: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 3PB
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Operating Income of $220,000 in 2019, when production was 3,000 units
Variable expenses per unit: Direct Material $58
Direct Labour $74
Variable Manufacturing Overhead $48
Fixed expenses: Fixed Manufacturing Overhead $215,000
Fixed Selling Costs $65,000
Fixed Administrative Costs $160,000
Briefly explain the impact of each of the following scenarios on the break-even point and the margin of
safety:
Increase in sales volume
Increase in total fixed costs
Increase in selling price per unit
Decrease in variable costs per unit
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