Problem #3 - At Freeze Inc. the manufacturing of each air conditioning has a variable cost of $500 per unit and it takes place in a facility that has a monthly fixed cost of $250,000. If Freeze Inc. sells each unit at $1,000, how many units do they need to sell every month to break-even? What is the monthly revenue at the break-even point? a. b. с. What is the monthly variable cost at the break-even point?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

This is not a graded question so stop responding that back to me! Also, I posted 3A answer & I guess that wasn't correct so here is the actual 3A question 

Problem #4 - The mean number of air conditioning units assembled per month by Freeze, Inc. is 750 and the standard
deviation is 100 units.
If the number of air conditioning units assembled per month follows a normal distribution, calculate the
a.
probability of Freeze, Inc. to assemble a quantity of air conditioning units greater than the monthly break-even point
calculated in problem 3-a.
b.
An improved assembling process is proposed to Freeze, Inc. to reduce the variable cost from $500 per
unit to $400 per unit., increase the mean number of air conditioning units assembled per month from 750 to 850 and
reduce the standard deviation to 90 units. As a result of the improvements, monthly fixed costs would go up from
$250,000 to $300,000. Once these improvements are implemented, calculate the new number of air conditioning
units that Freeze Inc. must sell every month to break-even, discuss and justify if you would recommend the process
improvement initiative.
с.
If the number of air conditioning units assembled per month still follows a normal distribution after the
implementation of the improvements described on item (b), calculate the probability of Freeze, Inc. to assemble a
quantity of air conditioning units greater than the new monthly break-even point. Now that you know this probability,
would you change your recommendation? Justify.
Discussion Question #1
- Using your "own words", discuss the differences among decision making under
certainty, decision making under risk, and decision making under uncertainty. Provide an example for each one of them.
Discussion Question #2
- Using your "own words", discuss how the coefficient of determination and the
coefficient of correlation are related and how would you use them in regression analysis.
Transcribed Image Text:Problem #4 - The mean number of air conditioning units assembled per month by Freeze, Inc. is 750 and the standard deviation is 100 units. If the number of air conditioning units assembled per month follows a normal distribution, calculate the a. probability of Freeze, Inc. to assemble a quantity of air conditioning units greater than the monthly break-even point calculated in problem 3-a. b. An improved assembling process is proposed to Freeze, Inc. to reduce the variable cost from $500 per unit to $400 per unit., increase the mean number of air conditioning units assembled per month from 750 to 850 and reduce the standard deviation to 90 units. As a result of the improvements, monthly fixed costs would go up from $250,000 to $300,000. Once these improvements are implemented, calculate the new number of air conditioning units that Freeze Inc. must sell every month to break-even, discuss and justify if you would recommend the process improvement initiative. с. If the number of air conditioning units assembled per month still follows a normal distribution after the implementation of the improvements described on item (b), calculate the probability of Freeze, Inc. to assemble a quantity of air conditioning units greater than the new monthly break-even point. Now that you know this probability, would you change your recommendation? Justify. Discussion Question #1 - Using your "own words", discuss the differences among decision making under certainty, decision making under risk, and decision making under uncertainty. Provide an example for each one of them. Discussion Question #2 - Using your "own words", discuss how the coefficient of determination and the coefficient of correlation are related and how would you use them in regression analysis.
Problem #3 – At Freeze Inc. the manufacturing of each air conditioning has a variable cost of $500 per unit and it takes
place in a facility that has a monthly fixed cost of $250,000.
If Freeze Inc. sells each unit at $1,000, how many units do they need to sell every month to break-even?
What is the monthly revenue at the break-even point?
What is the monthly variable cost at the break-even point?
What is the total operating cost at the break-even point?
а.
b.
С.
d.
If Freeze Inc. sells 600 units at $1,000 each on a given month, calculate the profit.
e.
Transcribed Image Text:Problem #3 – At Freeze Inc. the manufacturing of each air conditioning has a variable cost of $500 per unit and it takes place in a facility that has a monthly fixed cost of $250,000. If Freeze Inc. sells each unit at $1,000, how many units do they need to sell every month to break-even? What is the monthly revenue at the break-even point? What is the monthly variable cost at the break-even point? What is the total operating cost at the break-even point? а. b. С. d. If Freeze Inc. sells 600 units at $1,000 each on a given month, calculate the profit. e.
Expert Solution
Step 1

Hi student, 

Since there are multiple questions, we will answer only first question. First question relates to Statistics subject, please submit it under Statistics. We will answer second question. Second question has multiple subparts, we will answer only first three subparts. 

steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education