takes to A firm, which sells widgets, has annual fixed costs of $16,000,000. Each widget sells for $13 and $8 in variable costs manufacture. If sales volume last year was $30,000,000, what is the number of widgets the firm must sell to have EBIT = 0?

takes to A firm, which sells widgets, has annual fixed costs of $16,000,000. Each widget sells for $13 and $8 in variable costs manufacture. If sales volume last year was $30,000,000, what is the number of widgets the firm must sell to have EBIT = 0?

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...

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Question

What is the number of widgets the firm must sell to have EBIT

takes
to
A firm, which sells widgets, has annual fixed
costs of $16,000,000. Each widget sells for $13
and
$8 in variable costs
manufacture. If sales volume last year was
$30,000,000, what is the number of widgets
the firm must sell to have EBIT = 0?

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A firm, which sells widgets, has annual fixed costs of $16,000,000. Each widget sells for $13 and takes $8 in variable costs to manufacture. If sales volume last year was $30,000,000, what is the number of widgets the firm must sell to have EBIT = 0? NO WRONG ANSWER
and takes to A firm, which sells widgets, has annual fixed costs of $16,000,000. Each widget sells for $13 $8 in variable costs manufacture. If sales volume last year was $30,000,000, what is the number of widgets the firm must sell to have EBIT = 0?
ANSWER
Answer this Financial Accounting Problem
SmartTech Electronics sells wireless earbuds at $80 per unit. The variable cost per unit is $35, and fixed costs are $90,000 per year. What sales volume (in units) is needed to achieve a target profit of $60,000?
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Charlevoix Cases makes mobile phone cases. The company has collected the following price and cost characteristics: Sales price $ 12.00 per case Variable costs 5.50 per case Fixed costs 403,000 per year Assume that the company plans to sell 77,000 units annually. Consider requirements (b), (c), and (d) independently of each other. Required: What will be the operating profit? What is the impact on operating profit if the sales price decreases by 20 percent? Increases by 10 percent? Note: Do not round intermediate calculations. What is the impact on operating profit if variable costs per unit decrease by 20 percent? Increase by 10 percent? Note: Do not round intermediate calculations. Suppose that fixed costs for the year are 20 percent lower than projected and variable costs per unit are 20 percent higher than projected. What impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much? Note: Do not round intermediate…
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