QUESTION 4Exxarro Llimited is considering pricing and costing for the year ahead. The following data based on expectedproduction and sales of 15 000 units are provided for analysis:Variable manufacturing costFixed manufacturing costR1 185 000R510 000R5 per unit soldR130 000Sales commissionFixed administration costSalesR210 per unitStudy the information provided above and answer the following questions independently:4.1 Calculate the break-even sales value.4.2 Calculate the sales volume required to achieve a profit of R 800 000.4.3 Suppose Exxaro Limited is considering a decrease of 10% per unit in the selling price of the product with theexpectation that it would increase sales volume by 10%. Is this a good idea? Motivate your answer with relevantcalculations.

Answered: Image /qna-images/answer/182d10a0-2266-4408-870e-1597e5f60535.jpg

Answered: QUESTION 4 Exxarro Llimited is…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

G http Chapter Review My... Sales price Contribution margin ratio Fixed costs Tra.. Vernon Company reported the following data regarding the product it sells: a. Break-even point in dollars a. Break-even point in units b. Sales in dollars b. Sales in units c. Break-even point in dollars c. Break-even point in units $60 Man... $ 10% $216,000 M Questio... Required Use the contribution margin ratio approach and consider each requirement separately. b Ans... 2,160,000 36,000 Bes... Saved a. What is the break-even point in dollars? In units? b. To obtain a profit of $54,000, what must the sales be in dollars? In units? c. If the sales price increases to $72 and variable costs do not change, what is the new break-even point in dollars? In units? US fron.
CVP analysis—what-if questions; breakeven Monterey Co. makes and sells a single product. The current selling price is $15 per unit. Variable expenses are $9 per unit, and fixed expenses total $27,000 per month. Required:(Unless otherwise stated, consider each requirement separately.)a. Calculate the break-even point expressed in terms of total sales dollars and sales volume.b. Calculate the margin of safety and the margin of safety ratio. Assume current sales are $75,000.c. Calculate the monthly operating income (or loss) at a sales volume of 5,400 units per month.d. Calculate monthly operating income (or loss) if a $2 per unit reduction in selling price results in a volume increase to 8,400 units per month.e. What questions would have to be answered about the cost–volume–profit analysis simplifying assumptions before adopting the price cut strategy of part d ?f. Calculate the monthly operating income (or loss) that would result from a$1 per unit price increase and a $6,000 per month…
Unit sales (a) Selling price per unit Variable cost per unit Traceable fixed expense TB MC Qu. 12A-46 Woodridge Corporation manufactures numerous... Woodridge Corporation manufactures numerous products, one of which is called Alpha-32. The company has provided the following data about this product Multiple Choice $1,375,220 77,000 76.00 61.00 $1,323,000 $52.220 Help $ $ Management is considering increasing the price of Alpha-32 by 5%, from $76.00 to $79.80. The company's marketing managers estimate that this price hike would decrease unit sales by 5%, from 77,000 units to 73,150 units Assuming that the total traceable fixed expense does not change, what net operating income will product Alpha-32 earn at a price of $79.80 if this sales forecast is correct? Save & Exit
Question Part Score If it holds the sales price constant and makes the suggested changes, how many units of product will Wildhorse have to sell to make the same operating Income before taxes as last year? Required sales units If Wildhorse wishes to maintain the same contribution margin ratio, what selling price per unit of product must it charge next year to cover the increased materials costs? (Round answer to 2 decimal places, e.g. 15.25) Selling price per unit $
Zachary Company reported the following data regarding the product it sells: 11 Sales price Contribution margin ratio Fixed costs 48 25% $336,000 Required Use the contribution margin ratio approach and consider each requirement separately. a. What is the break-even point in dollars? In units? b. To obtain a profit of $48,0000, what must the sales be in dollars? In units? c. If the sales price increases to $60 and variable costs do not change, what is the new break-even point in dollars? In units? a Break-even point in dollars Break-even point in units b. Sales in dollars Sales in units c Break-even point in dollars Break-even point in units
Determinant Company is a price−taker and uses a target−pricingapproach. Refer to the following information: Production volume 602,000 units per year Market price $34 per unit Desired operating income 17% of total assets Total assets $13,800,000 What is the target full product cost in total for the year? Assume all units produced are sold. Question content area bottom Part 1 A. $13,800,000 B. $18,122,000 C. $2,346,000 D.$ 102, 340
QUESTION 38 Insourcing incurs an annual fixed cost of $30,000 and a variable cost of $60 per unit. Outsourcing incurs an annual fixed cost of $50,000 and a variable cost of $20 per unit. Using the Make-or-Buy analysis, what is the indifference point between the two alternatives? (Note your answer for question 39) a) 500 units b) 1000 units c) 1500units d) 2000 units e) 800 units QUESTION 39 For the scenario in Q38, anticipated demand is then forecast to be 1000 units. Which option would be most appropriate? a) Insource b) Outsource c) Either option d) Not enough information to evaluate e) None
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.
Please solve this question X limited has provided the following informationSelling Price Rs. 20 per unit Variable Manufacturing Cost Rs. 11 per unit Variable Selling cost Rs. 3 per unit Fixed Factory Overheads Rs. 5, 40, 000 per year Fixed Selling Cost is Rs. 252, 000 per year You are required to calculate the followings : (1) Break Even point (ii) PV ratio (iii) Number of units that must be sold to earn a profit of Rs. 60,000 per year(iv) Impact of decrease in selling price by 10 percent on Breakeven Point.(v) Impact of increase in selling price by 20% on Break Even point.
v.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSession Lo... Break-Even Sales and Sales to Realize a Target Profit For the current year ending October 31, Papadakis Company expects fixed costs of $422,400, a unit variable cost of $46, and a unit selling price of $68. a. Compute the anticipated break-even sales (units). units. b. Compute the sales (units) required to realize a target profit of $96,800. units Check My Work Previous 6 Next Oct 26 6:18
Assume the following information: Selling price Variable expense ratio Fixed expenses Unit sales Multiple Choice O O How many units need to be sold to achieve a target profit of $16,900? 4,150 units 1,019 units 2,817 units Amount 6,220 units $30 80% $ 8,000 per month 3,400 per month
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 b 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 P500,000 [300,000) 200,000 (125,000) 75,000 ( 30,000) P 45,000 Less: Fixed costs Income before taxes Less: Income taxes Net incom 7. If the company wants an after-tax profit of P60,000 on its expected sales volume of 20,000 units, what price must it charge? 8. The company is considering offering its salespeople a 5% commission on sales. What would the total sales, in pesos, have to be in order to implement the commission plan and still earn the planned before-tax income of P75,000? 9. If the company wants its before tax profit higher than the planned P75,000 by P15,000, compute the required increase in peso sales.

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS