Give me sell? (financial accounting) The Price Co. can make widgets for $5 and sell them for $8. Iffixed costs are $100,000, then how many widgets must they sellin order to have an EBIT of $50,000?

Explanation of EBIT: EBIT (Earnings Before Interest and Taxes) is a measure of a company's operating…

Answered: The Price Co. can make widgets for $5…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 8EB: Shonda & Shonda is a company that does land surveys and engineering consulting. They have an...

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The Price Co. can make widgets for $5 and sell them for $8. If fixed costs are $100,000, then how many widgets must they sell in order to have an EBIT of $50,000? Question
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A Company wants to introduce new mobile phone into the market. The estimated price of each mobile phone is RO 800. The company requires a profit margin of 15% on sales. Calculate a target cost for the new mobile phone.
The per-unit cost of an item is its average total cost (= total cost/quantity).Suppose a new cell phone application costs $100,000 to develop and only $.50 per unit to deliver to each cell phone customer. What will be the per-unit cost of the application if it sells 100 units? 1000 units? 1 million units?
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1. Your new company is planning to make and sell customized mailboxes. You have set startup costs of $2046. Each mailbox costs you $34 to make. If you plan to sell your mailboxes for $49.50, how many must you make and sell to break even? Explain the how you determined the answer. 2. If the retail price is fixed at $1.00, what effect does increasing the retail and wholesale margins have on the manufacturer's selling price? Explain why this is the case. 3. Define unit contribution in your own words. Is a high or low unit contribution preferable for profitability? 4. How do increases in the retail and wholesale margins (again, with a fixed retail price) affect the unit contribution? Why? 5. If you increase any of the fixed cost factors, what happens to the number of units the company needs to sell to break even? To the market share necessary to achieve breakeven?. 6. What change (increase or decrease) to the following factors increases the profit impact? Decreasing retail margin/unit…
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The Price Co. can make widgets for $5 and sell them for $8. If fixed costs are $100,000, then how many widgets must they sell in order to have an EBIT of $50,000?