Question 5:(total 8 marks) XEMACompany estimates that variable costs will be 60% of sales and fixed...

Question 5:(total 8 marks)

XEMACompany estimates that variable costs will be 60% of sales and fixed costs will total $900,000. The selling price of the product is $5, and 500,000 units will be sold.

Instructions: Using the contribution margin:

(a) Compute the break-even point in units and dollars. (3marks)

(c) Compute the margin of safety in dollars and as a ratio.

(d) Compute net income.

Expert Solution

ekkarill92 answered 2 years ago

AD Company estimates that variable costs will be 70% of sales and fixed costs will total...

AD Company estimates that variable costs will be 70% of sales and fixed costs will total $1,800,000. The selling price of the product is $10, and 700,000 units will be sold. Instructions: Using the mathematical equation (a) Compute the break-even point in units and dollars. (b) Compute the margin of safety in dollars and as a ratio. (c) Compute net income.

Glacial Company estimates that variable costs will be 63.2% of sales, and fixed costs will total...

Glacial Company estimates that variable costs will be 63.2% of sales, and fixed costs will total $655,000. The selling price of the product is $3.90. Compute the break-even point in (1) units and (2) dollars. a. Break even sales __ units b. Break even sales __ $$ Assuming actual sales are $2,115,000, compute the margin of safety in (1) dollars and (2) as a ratio. a. Margin of safety __ $$ b. Margin of safety ratio (as percentage)

Hamood Plumbing Co. estimates that variable costs will be 70% of sales and fixed costs will...

Hamood Plumbing Co. estimates that variable costs will be 70% of sales and fixed costs will total OMR 2,160,000. The selling price of the product is OMR 10, and 750,000 units will be sold. Instructions Using the mathematical equation, (a) Compute the break-even point in units and Omani Riyals. (b) Compute the margin of safety in Riyals and as a ratio. (c) Compute net income. Problem 2 Ibri, Inc. owns a machine that produces baskets for the gift packages the...

Total sales revenue is $1000, total variable costs are $600 and total fixed costs are $1000....

Total sales revenue is $1000, total variable costs are $600 and total fixed costs are $1000. The price is $10 per unit. Compute the break-even volume in units (assume that the break-even point is in the relevant range). A) 166.7 units B) 250 units C) 280 units D) 2500 units Beta company allocates fixed overhead costs based on direct labor dollars, with an allocation rate of $5 per DL$. Beta sells 1000 units of product X per month at a...

No of units Fixed costs Total variable costs Total Costs Total Sales 0 15,000 0 15,000 ...

No of units Fixed costs Total variable costs Total Costs Total Sales 0 15,000 0 15,000 0 50 15,000 10,500 25,500 15,000 100 15,000 21,000 36,000 30,000 150 15,000 31,500 46,500 45,000 200 15,000 42,000 57,000 60,000 250 15,000 52,500 67,500 75,000 300 15,000 63,000 78,000 90,000 Create a CVP graph.

Hanley's Carwash has $80,000 of fixed costs and variable costs of 60% of sales. How much...

Hanley's Carwash has $80,000 of fixed costs and variable costs of 60% of sales. How much is total sales to achieve a net income of $140,000? A) $550,000 B) $220,000 C) $150,000. D) $366,667

A project currently generates sales of $15 million, variable costs equal 60% of sales, and fixed...

A project currently generates sales of $15 million, variable costs equal 60% of sales, and fixed costs are $3.0 million. The firm’s tax rate is 30%. Assume all sales and expenses are cash items. a. What are the effects on cash flow, if sales increase from $15 million to $16.5 million? (Input the amount as positive value. Enter your answer in dollars not in millions.) Cash flow: increases or decreses by __________? b. What are the effects on cash flow,...

Yonka Beauty products has total variable costs of $25 million and fixed costs of $60 million...

Yonka Beauty products has total variable costs of $25 million and fixed costs of $60 million per year. Sales for the year are 5 million units at an average price of $35. What are breakeven units? A.12 million. B.6 million. C.5 million. D.2 million. E.3 million.

If variable manufacturing costs are $8 per unit and total fixed manufacturing costs are $454,300, what...

If variable manufacturing costs are $8 per unit and total fixed manufacturing costs are $454,300, what is the manufacturing cost per unit if: a. 5,900 units are manufactured and the company uses the variable costing concept? $ b. 7,700 units are manufactured and the company uses the variable costing concept? $ c. 5,900 units are manufactured and the company uses the absorption costing concept? $ d. 7,700 units are manufactured and the company uses the absorption costing concept? $

If variable manufacturing costs are $8 per unit and total fixed manufacturing costs are $444,000, what...

If variable manufacturing costs are $8 per unit and total fixed manufacturing costs are $444,000, what is the manufacturing cost per unit if a. 6,000 units are manufactured and the company uses the variable costing concept? $ b. 7,400 units are manufactured and the company uses the variable costing concept? $ c. 6,000 units are manufactured and the company uses the absorption costing concept? $ d. 7,400 units are manufactured and the company used the absorption costing concept?

Question