Taylor Manufacturing had the following results of operations for the past year: Sales (18,000 units at $12) Direct materials and direct labor Overhead (25% variable) $216,000 $108,000 $20,000 Selling and administrative expenses (all fixed) $35,000 Operating income ($19,000) A foreign company (whose sales will not affect Taylor's market) offers to buy 5,000 units at $8.50 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $800 and selling and administrative costs by $400. If Taylor accepts the offer, its profits will:

Taylor Manufacturing had the following results of operations for the past year: Sales (18,000 units at $12) Direct materials and direct labor Overhead (25% variable) $216,000 $108,000 $20,000 Selling and administrative expenses (all fixed) $35,000 Operating income ($19,000) A foreign company (whose sales will not affect Taylor's market) offers to buy 5,000 units at $8.50 per unit. In addition to variable manufacturing costs, selling these units would increase fixed overhead by $800 and selling and administrative costs by $400. If Taylor accepts the offer, its profits will:

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 5EB: Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90....

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Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit of $360. The companys monthly fixed expenses are $72,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of January when they will sell 500 units. How many units will Kerr need to sell in order to realize a target profit of $120,000? What dollar sales will Kerr need to generate in order to realize a target profit of $120,000? Construct a contribution margin income statement for the month of June that reflects $600,000 in sales revenue for Kerr Manufacturing.
Maple Enterprises sells a single product with a selling price of $75 and variable costs per unit of $30. The companys monthly fixed expenses are $22,500. What is the companys break-even point in units? What is the companys break-even point in dollars? Construct a contribution margin income statement for the month of September when they will sell 900 units. How many units will Maple need to sell in order to reach a target profit of $45,000? What dollar sales will Maple need in order to reach a target profit of $45,000? Construct a contribution margin income statement for Maple that reflects $150,000 in sales volume.
Gelbart Company manufactures gas grills. Fixed costs amount to 16,335,000 per year. Variable costs per gas grill are 225, and the average price per gas grill is 600. Required: 1. How many gas grills must Gelbart Company sell to break even? 2. If Gelbart Company sells 46,775 gas grills in a year, what is the operating income? 3. If Gelbart Companys variable costs increase to 240 per grill while the price and fixed costs remain unchanged, what is the new break-even point?
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