selling price $300 per unit Variable cost $250 per unit Fixed cost $50000 Required: a) What is the breakeven point per unit? b) What is the activity level to generate a profit of $40000? c) If the company budgets to sell 5000 units of a product. Calculate the margin

selling price $300 per unit Variable cost $250 per unit Fixed cost $50000 Required: a) What is the breakeven point per unit? b) What is the activity level to generate a profit of $40000? c) If the company budgets to sell 5000 units of a product. Calculate the margin

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 10E: Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22...

See similar textbooks

Related questions

Q: A) The company's projected profit for the coming year is as follows: Total P 200,000' 120,000 80,000…

A: Hi student Since there are multiple questions, we will answer only first question.O

Q: Marigold Corp. is using the target cost approach on a new product. Information gathered so far is as…

A: The target cost is the maximum amount that a company will incur on a product, project, or service.…

Q: Consider the following information for a given business. Sale revenue =GHS40,000 VC per unit…

A: The contribution margin is computed by subtracting the variable cost from the sale revenue. The…

Q: Calculate the per-unit contribution margin of a product that has a sale price of $200 if the…

A: The contribution margin is calculated as the difference between the sales and variable costs. The…

Q: Bloom Company predicts it will incur fixed costs of $255,000 and earn income of $427,500 in the next…

A: Total dollar sales = Fixed costs plus pretax income / Contribution margin ratio Variable costs =…

Q: Draw up a marginal cost statement on the basis that 12,000 units will be sold and calculate the net…

A: 1. Breakeven point is the point where there is no profit and loss. At this point the company has…

Q: A company produces and sells a product. The company has found that the costto produce x units of the…

A: The objective of the question is to find the number of units the company should produce and sell to…

Q: Find out BEP in units and value with the following data: Fixed cost - $50000 Variable cost - $40…

A: BEP in units : Fixed Cost/ (Selling Price per unit - Variable Cost Per unit) BEP in value : Fixed…

Q: If the variable cost is P15/unit, fixed cost is 265,000; and Sales is P55. Find the BEPs, and BEPx.…

A: Profit analysis equation With units sold (Q), variable cost per unit (VC), Fixed cost (FC) and price…

Q: Total fixed cost of a product is IDR 10,000,000 and variable cost is IDR 50,000 per unit. The sale…

A: The Break-even point is at which the company earns no profit/loss. At this point companies…

Q: A company has return on sales of 20%, income of $50,000, selling price of $10, and a contribution…

A: A cost accounting system is a system of accounting that is helpful for the internal management to…

Q: Assume that the linear cost and revenue models apply. An item costs $13 to make. If fixed costs are…

A: The question is related to the Revenue function. Revenue - Cost = Profit

Q: A company expects to sell 75,000 widgets at a price of $10.00. The unit variable costs are estimated…

A: Given Sales = 75,000 Per unit Price = $10.00 Variable Cost = $8.00 Fixed Cost = $125,000

Q: P Company has provided the following data: Sales Price per unit: $50 Variable Cost per unit: $30…

A: We have the following information: Sales Price per unit: $50 Variable Cost per unit: $30 Fixed…

Q: Required: 1. Compute the amount of total dollar sales. 2. Compute the amount of total variable…

A: The problem the part of cvp analysisIn this the variable costs are those which change with…

Q: 1. Calculate the contribution margin rate, the sales dollar breakeven point, and the unit sales…

A: Contribution margin the contribution of sales towards recovery of fixed costs of the company.…

Q: A company would like to determine various costs and points to aid them in deciding whether to expand…

A: P/V Ratio:-Profit volume ratio is the relationship between the contribution and Sales. The formula…

Q: A firm uses simple linear regression to forecast the costs for its main product line. If fixed costs…

A: Solution:-The regression equation set up will be: y (total costs) = $235,000 + $10…

Q: A projected income statement of Hailwork’s company for the coming year follows: Sales $506300…

A: “Since you have asked multiple sub-parts, we will solve the first three sub-part for you. If you…

Q: Determine the margin of safety in dollars. e. If the company wants to have net income of $70,000,…

A: The margin of safety: The margin of safety of a company measures how much more it produces than it’s…

Q: Suppose the marginal cost and marginal revenue (in ¢000) for a product produced by a company is…

Question

If selling price $300 per unit

Variable cost $250 per unit

Fixed cost $50000

Required:

a) What is the breakeven point per unit?

b) What is the activity level to generate a profit of $40000?

c) If the company budgets to sell 5000 units of a product. Calculate the margin

of safety.

d) Calculate the Contribution/Sales Ratio of the product.

e) Find the breakeven point in sales revenue.

f) Calculate the sales revenue that is required to generate a profit of $40000.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22 each in the coming year. Total variable costs equal 1,086,800. Total fixed costs equal 8,000,000. (Round all ratios to four significant digits, and round all dollar amounts to the nearest dollar.) Required: 1. What is the contribution margin per unit? What is the contribution margin ratio? 2. Calculate the sales revenue needed to break even. 3. Calculate the sales revenue needed to achieve a target profit of 245,000. 4. What if the average price per unit increased to 23.50? Recalculate: a. Contribution margin per unit b. Contribution margin ratio (rounded to four decimal places) c. Sales revenue needed to break even d. Sales revenue needed to achieve a target profit of 245,000
Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
A company would like to determine various costs and points to aid them in deciding whether to expand or not. If you are given the following information, compute the required amounts and / or figures.Selling price / unit = P100 Variable cost / unit = P70Annual fixed cost = P500,000 Compute 5. Sales in units to earn a profit of 10% of sales.
Consider the following information for a given business. Sale revenue =GHS40,000 VC per unit =GHS20 Activity level =1,000 to break even Required: 1. Determine the TFC 2. Express the contribution as a percentage of sale. 3. The company plans to sale 1,500 unit in the next period. What will be the percentage margin of safety (MoS) 4. What margin should the business employ for planning purposes? 5. What total profit should the business expect in order to achieve it's planned sales?
Total fixed cost of a product is IDR 10,000,000 and variable cost is IDR 50,000 per unit. The sale price is IDR.75,000 per unit . How much products should be produced to get BEP? Prove your answer and make a graphic. ..And If the company need profit IDR 10,000,000. How much is the sales price? Prove your answer.
Suppose the marginal cost and marginal revenue (in ¢000) for a product produced by a company is estimated to be MC=q+35 MR=560+22q-q^2 Where q is the quantity produced and the firm’s break-even is 5 units per week You are Required to I. determine the total cost and the total revenue function in terms of q. II. estimate the output at which profit is maximize III. calculate the maximum profit
A company produces and sells a product. The company has found that the costto produce x units of the product is given by C(x) = 50x + 200 (in dollars),and the revenue from selling x units is given by R(x) = 100x - x? (in dollars).What is the number of units the company should produce and sell to maximize profit
Marigold Corp. is using the target cost approach on a new product. Information gathered so far is as follows: Expected annual sales Desired profit per unit Target cost What is the unit selling price? O $0.30 O $0.64 O $0.62 O $0.32 500000 units $0.32 $150000
there are still these to answer Draw up a marginal cost statement on the basis that 12,000 units will be sold and calculate the net profit or loss c. Briefly explain what is meant by breakeven points d. Calculate the breakeven units in value and explain what it means to the director e. Calculate the sales activity to reach a target profit of £20,000.
Solve the following independent cases and label your supporting computations properly. A) The company's projected profit for the coming year is as follows: Total P 200,000' 120,000 80,000 64,000 16,000 Per Unit P 20 Sales Less: Variable Costs 12 P 8 Contribution Margin P Less: Fixed Costs Net Income 1. Compute the additional profit that the company would earn if sales were P25,000 more than expected. B) KTA sells a special type of health food at a price of P16 per pound. Last year, it purchases this food from its supplier at a cost of P12 per pound. The supplier informed KTA that its cost increases and that this product will now be priced at P14 a pound. Over the years, KTA established a steady market and intends to pass the cost increase along to its customers and also add a P1 per unit to the price for additional profit. Fixed cost for the year are not expected to change and will remain at P34,000. Income tax rate is 32%. The net income after tax last year was P24,000. 2. If KTA can…
1. Calculate the contribution margin rate, the sales dollar breakeven point, and the unit sales breakeven point. 2. Use the following information to perform your calculations. a. Net Sales: $50,000.00 b. Contribution Margin: $20,000.00 c. Total Fixed Costs: $15,500.00 d. Unit Sales Price: $25.00 3. Provide the formula and write out the equation that you use for each calculation. a. Contribution Margin Rate: b. Sales Dollar Breakeven Point: C. Unit Sales Breakeven Point:
Suppose a ceiling fan manufacturer has the total cost function C(x) = 35x + 1200 and the total revenue function R(x) = 65x. (a) What is the equation of the profit function P(x) for this commodity? P(x) = (b) What is the profit on 20 units? P(20) = Interpret your result. The total costs are less than the revenue. The total costs are more than the revenue. The total costs are exactly the same as the revenue. (c) How many fans must be sold to avoid losing money? fans