a. What is Serendipity Sound’s break-even point in units?b. How many units would Serendipity Sound have to sell in order to earn $260,000? c. What is the firm’s margin of safety?d. Management estimates that direct-labor costs will increase by 8 percent next year. How many units will the company have to sell next year to reach its break-even point?e. if the company’s direct-labor costs do increase by 8 percent, what selling price per unit of product must it charge to maintain the same contribution-margin ratio? Serendipity Sound, Inc., manufactures and sells compact discs. Price and cost data are as follows:Selling price per unit (package of two CDs)$25.00Variable costs per unit:Direct material$10.50Direct labor5.00Manufacturing overheadSelling expenses3.001.30Total variable costs per unit$19.80Annual fixed costs:Manufacturing overheadSelling and administrative192,000276,000$Total fixed costs$468,000Forecasted annual sales volume (120,000 units)$3,000,000In the following requirements, ignore income taxes.

Given Information, Total fixed cost =$468,000 Selling price per unit =$25 Variable costs per unit…

Serendipity Sound, Ic., manufactures and sells compact discs. Price and cost data are as follows: Selling price per unit (package of two CDs) $ 25.00 Variable costs per unit: Direct material $ 10.50 Direct labor 5.00 Manufacturing overhead Selling expenses 3.00 1.30 Total variable costs per unit 19.80 Annual fixed costs: Manufacturing overhead Selling and administrative 192,000 276,000 Total fixed costs 468,000 Forecasted annual sales volume (120,000 units) $3,000,000 In the following requirements, ignore income taxes.

Serendipity Sound, Ic., manufactures and sells compact discs. Price and cost data are as follows: Selling price per unit (package of two CDs) $ 25.00 Variable costs per unit: Direct material $ 10.50 Direct labor 5.00 Manufacturing overhead Selling expenses 3.00 1.30 Total variable costs per unit 19.80 Annual fixed costs: Manufacturing overhead Selling and administrative 192,000 276,000 Total fixed costs 468,000 Forecasted annual sales volume (120,000 units) $3,000,000 In the following requirements, ignore income taxes.

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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Similar questions

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