Thad Morgan, a motorcycle enthusiast, has been exploring the possibility of relaunching the Western Hombre brand of cycle that was popular in the 1930s. The retro-look cycle would be sold for $17,000 and at that price, Thad estimates 400 units would be sold each year. The variable cost to produce and sell the cycles would be $12,750 per unit. The annual fixed cost would be $1,615,000. What is the break-even in unit sales? Break-even in unit sales
Thad Morgan, a motorcycle enthusiast, has been exploring the possibility of relaunching the Western Hombre brand of cycle that was popular in the 1930s. The retro-look cycle would be sold for $17,000 and at that price, Thad estimates 400 units would be sold each year. The variable cost to produce and sell the cycles would be $12,750 per unit. The annual fixed cost would be $1,615,000. What is the break-even in unit sales? Break-even in unit sales
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:i Confirm your calculations in Requirement 3 above by increasing the unit sales in your worksheet by 20% so that the Data area looks
like this:
A
1 Chapter 5: Applying Excel
2
3 Data
4 Unit sales
5 Selling price per unit
6 Variable expenses per unit
7 Fixed expenses
Net operating income (loss) $ 168,000
Percentage increase in net operating income
B C
What is net operating income? (Negative amount should be indicated by a minus sign.)
72,000 units
$
$
$120,000
What is the break-even in unit sales?
By what percentage did the net operating income increase?
Break-even in unit sales
10 per unit
6 per unit
Thad Morgan, a motorcycle enthusiast, has been exploring the possibility of relaunching the Western Hombre brand of cycle that
was popular in the 1930s. The retro-look cycle would be sold for $17,000 and at that price, Thad estimates 400 units would be sold
each year. The variable cost to produce and sell the cycles would be $12,750 per unit. The annual fixed cost would be $1,615,000.
40%
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