Suppose that a company expects the following financial results from a project during its first-year operation: Sales revenue: $300,000 Variable costs: $100,000 Fixed costs: $50,000 Total unit produced and sold:10,000 units a. Draw and label a break-even point graph. b. Compute the contribution per unit. c. Compute the break-even point in units sold. d. Compute the profit be if only 7500 units are sold

Sales revenue = $300,000.SP = $300,000/10,000 = $30.Variable cost = $100,000.VC per unit =…

Answered: Suppose that a company expects the…

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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A company requires $1400000 is sales to meet its net income target. Its contribution margin is 50% and fixed costs are $300000. What is the company's target net income?
Spruce Enterprises anticipates fixed costs of $25,000. Variable costs and expenses are expected to be 60% of sales. The president has asked you to develop a worksheet to calculate sales needed to break even and sales needed to achieve any desired net income (file name DESNI). Your worksheet should include a Data Section that contains fixed costs, desired net income, and variable costs as a percentage of sales. Assume as initial input for your model that the company wishes to achieve a net income of $10,000.
If the objective of the firm is to get 25% profit, how many units does the firm need to sell if the price per unit is $250? Given information: Annual fixed costs are 114,000, CTO is .65, breakeven point is 175,384.62.
Golden Goodness (GG) has an investment center that had the following data: Operating Income $28,000 Sales $350,000 Invested assets $175,000 PMB has set a minimum acceptable rate of return at 14%. Using the information, answer the following questions. You must include what type of number it is (%, $, etc.) What is the profit margin? What is the investment turnover? What is the return on investment?
(b) The cost of materials is expected to rise by 20%, while total fixed costs are expected to rise by RM13,000 per year:Calculate the number of units that must be sold for the company's net profit to be maintained. Assume that the rest of the data is unchanged. Determine a new break-even point and margin of safety in bottles if the selling price change to RM 6 per packet. Assume that all other variables remain constant. please provide calculations for each of them.

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