QUESTION 6Big Seats has the capacity to produce 100,000 sofas per year but only produces 80,000 sofas per year. The sale price is $1,000 each. Directmaterials equals $200 per sofa, direct labor equals $200 per sofa, and allocated overhead equals $100,000 per year. Buy & Large offers to buyan additional 2,000 sofas but is only willing to pay $800 per sofa. What is the additional operating income (loss) of accepting the offer?ENTER NEGATIVE NUMBERS WITH A "-" SIGN. DO NOT USE PARENTHESES. EXAMPLE: -10,000

Additional operating income = offer price - variable cost

Answered: QUESTION 6 Big Seats has the capacity…

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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Steven and Son Inc. sells its car wash package for $180 per unit, its total variable costs per unit is $80 per unit, whereas the total fixed costs are $150,000. The company is considering the increase this year targeted profit to $250,000. What is the company's break even point in units? Select one: O a. To breakeven the company needs to produce 1,500 units O b. To breakeven the company needs to produce 1,875 units c. To breakeven the company needs to produce 2,500 units d. To breakeven the company needs to produce 833 units
Plymouth corporation sells units for $108 each Variable costs are $39 per unit, and fixed costs are $212,000. If Plymouth leases a bed cast wail increase by $85,000 a year, but production will be more efficient, saving $5 per unit. At what level of production will Plymouth be indifferent between leasing and not leasing the new machine?
need correct answer
806Praveen Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding, that has not been as profitable as planned. Since Product XT is manufactured and marketed independently of the other products, its total costs can be precisely measured. Next year’s plans call for a $200 selling price per 100 yards of XT rope. Its fixed costs for the year are expected to be $270,000, up to a maximum capacity of 700,000 yards of rope. Forecasted variable costs are $140 per 100 yards of XT rope.RequiredEstimate Product XT’s break-even point in terms of (a) sales units and (b) sales dollars.Check (1a) Break-even sales, 4,500 unitsPrepare a contribution margin income statement showing sales, variable costs, and fixed costs for Product XT at the break-even point.
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
A4
Wexford Industrial Supply is considering a new project with estimated depreciation of $27,000 and fixed costs of $32,000. The accounting break-even level of sales is $67,160 and the average variable costs per unit are $4.80. What is the accounting break-even quantity? Multiple Choice 12,292 units 6,667 units 1,700 units 5,625 units 13,992 units Please answer fast i give you upvote.
Break-Even in Units Gelbart Company manufactures gas grills. Fixed costs amount to $11,418,000 per year. Variable costs per gas grill are $200, and the average price per gas grill is $500. Required: 1. How many gas grills must Gelbart Company sell to break even? gas grills 2. If Gelbart Company sells 41,785 gas grills in a year, what is the operating income? 3. If Gelbart Company's variable costs increase to $210 per grill while the price and fixed costs remain unchanged, what is the new break-even point? If required, round your answer to the nearest whole number. gas grills
aa.6
2 Campbell Company currently produces and sells 7,600 units annually of a product that has a variable cost of $12 per unit and annual fixed costs of $373,000. The company currently earns a $83,000 annual profit. Assume that Campbell has the opportunity to invest in new labor-saving production equipment that will enable the company to reduce variable costs to $10 per unit. The investment would cause fixed costs to increase by $9,300 because of additional depreciation cost. Required a. Use the equation method to determine the sales price per unit under existing conditions (current equipment is used), b. Prepare a contribution margin income statement, assuming that Campbell invests in the new production equipment. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a contribution margin income statement, assuming that Campbell invests in the new production equipment. CAMPBELL COMPANY Contribution margin Income statement Sales Variable costs…
38. RYX Company has the chance to introduce a new product. RYX expects the product to sell for P75 with a variable cost per unit of P50. The annual fixed costs, depreciation not included is P4,500,000. The company expects to sell 300,000 units. To produce a new product line, the company needs to purchase a new machine that costs P6,000,000. The new machine is expected to last for four years with a very negligible salvage value. The company has a policy of depreciating its machine for both book and tax purposes for four years. The company has a marginal cost of capital of 13.75% and is subject to a tax rate of 40%. How much is the machine’s net present value?
Exercise E Analysis of Hair Care Company's citrus hair conditioner reveals that it is losing $5,000 annually. The company sells 5,000 units of citrus hair conditioner each year at $10 per unit. Variable costs are $6 per unit. None of the company's fixed costs would be saved if the citrus hair conditioner were eliminated. What would be the increase or decrease in company net income if citrus hair condition were eliminated?

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