Problem 19-04 The manufacturer of a product that has a variable cost of $2.60 per unit and total fixed cost of $145,000 wants to determine the level of output necessary to avoid losses. What level of sales is necessary to break-even if the product is sold for $4.65? Round your answer to the nearest whole number. units What will be the manufacturer’s profit or loss on the sales of 87,000 units? Round your answer to the nearest dollar. $ If fixed costs rise to $190,000, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number. units If variable costs decline to $2.40 per unit, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number. units If fixed costs were to increase to $190,000, while variable costs declined to $2.40 per unit, what is the new break-even level of sales? Round your answer to the nearest whole number. units If a major proportion of fixed costs were noncash (depreciation), would failure to achieve the break-even level of sales imply that the firm cannot pay its current obligations as they come due? Suppose $100,000 of the above fixed costs of $145,000 were depreciation expense. What level of sales would be the cash break-even level of sales? Use the initial variable cost in your calculations. Round your answer to the nearest whole number. units

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Problem 19-04

The manufacturer of a product that has a variable cost of $2.60 per unit and total fixed cost of $145,000 wants to determine the level of output necessary to avoid losses.

What level of sales is necessary to break-even if the product is sold for $4.65? Round your answer to the nearest whole number.
units
What will be the manufacturer’s profit or loss on the sales of 87,000 units? Round your answer to the nearest dollar.
$
If fixed costs rise to $190,000, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number.
units
If variable costs decline to $2.40 per unit, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number.
units
If fixed costs were to increase to $190,000, while variable costs declined to $2.40 per unit, what is the new break-even level of sales? Round your answer to the nearest whole number.
units
If a major proportion of fixed costs were noncash (depreciation), would failure to achieve the break-even level of sales imply that the firm cannot pay its current obligations as they come due? Suppose $100,000 of the above fixed costs of $145,000 were depreciation expense. What level of sales would be the cash break-even level of sales? Use the initial variable cost in your calculations. Round your answer to the nearest whole number.
units

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