XYZ company currently sells 15,000 units a month for $50 each, has variable costs of $20 per unit, and fixed costs of $300,000. The company is considering increasing the price of its units to $65 per unit. If the price is changed, how many units will the company need to sell for profit to remain the same as before the price change? Select one:

XYZ company currently sells 15,000 units a month for $50 each, has variable costs of $20 per unit, and fixed costs of $300,000. The company is considering increasing the price of its units to $65 per unit. If the price is changed, how many units will the company need to sell for profit to remain the same as before the price change? Select one:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Provide answer
Steven and Son Inc. sells its car wash package for $180 per unit, its total variable costs per unit is $80 per unit, whereas the total fixed costs are $150,000. The company is considering the increase this year targeted profit to $250,000. What is the company's break even point in units? Select one: O a. To breakeven the company needs to produce 1,500 units O b. To breakeven the company needs to produce 1,875 units c. To breakeven the company needs to produce 2,500 units d. To breakeven the company needs to produce 833 units
Nytre Limited sells executive office chairs for a price of $195 each. The contribution margin ratio of the chairs is 60% and the company’s fixed costs for this year are expected to be $80,000. The company has a profit target this year of $85,000 and is considering an improved design which is expected to increase sales. Question 13: How many chairs must the company sell to reach its profit target?
Kitts Company buys and sells a product that has a variable cost per unit of $22. Kitts' fixed costs amount to $56,000. The product sells for $26 each. The Company is currently making and selling 20,000 units of product. If Kitts is able to increase sales by 4,000 units, the break-even point will Multiple Choice increase by $16,000. decrease by $16,000. not change. The answer cannot be determined with the information provided.
Totally Tanked, Inc. sells tank tops. The firm is considering making some changes in order to achieve its goal of increasing its profit.If it makes no changes, the company anticipates the following for the coming year. Maria, one of the company’s managers suggests the following: “I think if we cut our price to $17 a tank top, we will increase our sales to 3,700,000 tank tops. I think that will help us achieve our goal” Question: Mr. Big, the CEO, upon hearing Maria’s plan says “This is great! We should go forward with your plan since we will increase sales by 700,000 tank tops.” How would you answer Mr. Big? # of tank tops to be sold 3,000,000 Selling price per tank top $20 Variable expense per tank top $8 Fixed expenses for the year $20,000,000
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…