Q3: A company is planning on producing a selling three products. The following table summarise price and cost data for the three products. Company officials estimate that the three products will sell in a mix such that 3 units of product 2 and 5 units of product 3 will be sold for each 2 sold of product 1. If fixed costs are estimated at $3.75 million determine the number of units of each product needed to break even. Product 1 Product 2 Product 3 Selling price Variable cost/pair 50 $85 $80 $95 40 67

Q3: A company is planning on producing a selling three products. The following table summarise price and cost data for the three products. Company officials estimate that the three products will sell in a mix such that 3 units of product 2 and 5 units of product 3 will be sold for each 2 sold of product 1. If fixed costs are estimated at $3.75 million determine the number of units of each product needed to break even. Product 1 Product 2 Product 3 Selling price Variable cost/pair 50 $85 $80 $95 40 67

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question 1: 0: B1, C1, D3 Suppose Elon Musk Ltd. That produces and sells two products. The X space sells for 5 $ and has a total Variable cost of 2.5 $ per unit. While Tesla sells for $10 per unit and the total variable cost is 5.5 $ per unit. The marketing department of Elon Musk Ltd has estimated for every ten units of X space sold five units of Tesla will be sold. The company's fixed costs total $ 40,000. Required: What is the total Breakeven points revenue? Show all your calculations.
Ex.3.
Total Cost Method of Product Pricing Smart Stream Inc. uses the total cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 3,500 units of cell phones are as follows: Variable costs per unit: Fixed costs: Direct materials $ 77 Factory overhead $134,700 Direct labor 35 Selling and administrative expenses 47,300 Factory overhead 23 Selling and administrative expenses 19 Total variable cost per unit $154 Smart Stream desires a profit equal to a 14% return on invested assets of $422,300. a. Determine the total costs and the total cost amount per unit for the production and sale of 3,500 cellular phones. Round the cost per unit to two decimal places. Total cost Total cost amount per unit b. Determine the total cost markup percentage for cellular phones. Round your answer to two decimal places. c. Determine the selling price of cellular phones. Round to the nearest cent. per cellular phone
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.
Sales Mix and Break-Even Sales Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $246,400, and the sales mix is 80% bats and 20% gloves. The unit selling price and the unit variable cost for each product are as follows: Unit Selling Price Unit Variable Cost $80 200 Products Bats Gloves a. Compute the break-even sales (units) for the overall enterprise product, E. units b. How many units of each product, baseball bats and baseball gloves, would be sold at the break-even point? Baseball bats Baseball gloves $60 120 units units
Question A and D
Problem No. 4 - Cost Volume Profit Analysis CBA Company provided you with the following information: Product C E F Units sold 60,000 20,000 20,000 25,000 Unit selling price P40 P35 P35 P35 Material cost per unit P15 P18 P20 P16 Labor cost per unit P5 P3 P3 P2 Variable cost per unit P2 P1 P1 P1 Total fixed costs P1,019,200 Desired profit P784,000 Requirement: 1. Determine the volume of each product to show a net profit of P784,000. 2. Prepare a statement of comprehensive income showing the sales, contribution margin of each product and total, and the net profit of P784,000.
PROBLEM 8. The Color Company manufactures and sells two products. The selling prices and variable costs of the products are as follows: Blujets Blupens P20 Selling prices Variable costs P40 8 24 The sales for 2021 were in the ratio of 3 Blujets to 1 Blupen. Sales volume for 2021 was P1 million. Fixed costs for 2020 amounted to P390,000. Requirements: 4. If the sales mix was to change to 2 units of blujets to 1 unit of Blupen, would this have any effect on the breakeven sales? If so, what would be the new breakeven sales? 5. Assuming that the sales volume would remain at P1 million, what net income would be generated using the sales mix in number (4) above? 6. What sales revenue would be required if the firm wishes to generate a net income of P328,900 if the original mix of 3:1 prevailed?
Sales Mix and Break-Even Analysis Michael Company has fixed costs of $814,900. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products follo Product Selling Price Variable Cost per Unit Contribution Margin per Unit QQ $570 $380 $190 ZZ 330 230 100 The sales mix for Products QQ and ZZ is 50% and 50%, respectively. Determine the break-even point in units of QQ and ZZ. If required, round your answers to nearest whole number. a. Product QQ units b. Product ZZ units Previous Check My Work 2 more Check My Work uses remaining.
Page 3.1 NUBD Co. is planning to market 300,000 units of Product X. The fixed costs are P600,000 and the variable costs are 60% of the selling price. Compute the selling price per unit if the company expects to earn a profit of P120,000 on its planned sales.
PROBLEM SOLVING 1. ABC Mfg. Co. buy and sells its lone product on which the following data are given: Sales volume per annum Unit selling price Production cost per unit: Direct materials Direct labor Variable factory overhead Fixed factory overhead (P25,000/20,000 units) Variable operating expense per unit Fixed operating expenses (P10,000/20,000 units) P1.00 0.50 a. Should the order be accepted? Why? 25,000 units P10.00 P3.50 2.50 2.00 1.25 A special order is received for P2,000 units from a remote market at P7.90, FOB destination. Packing and shipping costs are estimated at P1,200. Decision making: (show computation) b. What is the BEP price or sales cut-off price for the special order?
PROBLEM 6. After its cost structure (variable costs P15 per unit and monthly fixed costs of P125,000),as well as potential market, Babaero Company established what it considered to be a reasonable selling price. The company expected to sell 20,000 units per month and planned its monthly results as follows: Sales @P25 Less: Variable costs @P15 Contribution margin Less: Fixed costs P500,000 (300,000) 200,000 (125.000) 75,000 Income before taxes ( 30,000) P 45,000 Less: Income taxes Net income Requirements: On the basis of the preceding information, answer the following independent questions. 1. What is the break-even point in units? If the company determined that a particular advertising campaign had a high probability of increasing sales by 8,000 units, how much could it pay for such a campaign without reducing its planned profits? 3. If the company wants a P90,000 before-tax profit, how many units must it sell? 2