Question

In: Accounting

Fixed Costs are $500,000. Per unit costs are $75, and the proposed price is $200. How...

Fixed Costs are $500,000. Per unit costs are $75, and the proposed price is $200. How many units must be sold to break even? How many units must be sold to realize a $200,000 target return? (2 pts)

Solutions

Expert Solution

Fixed Cost=$5,00,000

Cost per unit =$75

Price =$200

Contribution =Proposed price per unit- costs per unit

i.e $200 - $75 = $125

Breakeven point in units = Fixed cost / Proposed price - Cost i.e Fixed Cost/Contribution

i.e $5,00,000 / $200 - $75 = $5,00,000 / $125

Breakeven point in units = 4,000 units.

Required Sales = Fixed Cost + Targeted Income / Contribution

=$5,00,000 + $2,00,000 / $125

Required Sales=5,600 Units.

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

Fixed Costs are $500,000. Per unit costs are $75, and the proposed price is $200. How...
Fixed Costs are $500,000. Per unit costs are $75, and the proposed price is $200. How many units must be sold to break even? How many units must be sold to realize a $200,000 target return?
Sells price per unit=$200 variable manufacturing costs per unit= $50 variable S&A costs per unit= $10...
Sells price per unit=$200 variable manufacturing costs per unit= $50 variable S&A costs per unit= $10 Fixed MOH= $50,000 Fixed S&A costs=$10,000 Units produced=5000 Units sold= 4000 Produce a full absorption income statement, what is the operating income produce a variable costing income statement, what is the operating income if units produced exceeds untis sold, does full absorption accounting or varible cost account result in a higher operating income
Plymouth Corp. sells units for $100 each. Variable costs are $75 per unit, and fixed costs...
Plymouth Corp. sells units for $100 each. Variable costs are $75 per unit, and fixed costs are $200,000. If Plymouth leases a new machine, fixed costs will increase by $60,000 a year, but production will be more efficient, saving $5 per unit. At what level of production will Plymouth be indifferent between leasing and not leasing the new machine?
Given the following information: Selling Price (per unit): $10,000 Variable Costs (per unit): $7,000 Fixed Costs:...
Given the following information: Selling Price (per unit): $10,000 Variable Costs (per unit): $7,000 Fixed Costs: $200,000 Required Each of these are separate situations: What is the break-even point in total sales in dollars? How many units need to be sold to make a profit of $20,000? How many units need to be sold to make a profit of $20,000 if fixed costs increase from $200,000 to $250,000? How many units would they need to sell if they wanted to...
Given the following information: Selling Price (per unit): $10,000 Variable Costs (per unit): $7,000 Fixed Costs:...
Given the following information: Selling Price (per unit): $10,000 Variable Costs (per unit): $7,000 Fixed Costs: $200,000 Required Each of these are separate situations: What is the break-even point in total sales in dollars? How many units need to be sold to make a profit of $20,000? How many units need to be sold to make a profit of $20,000 if fixed costs increase from $200,000 to $250,000? How many units would they need to sell if they wanted to...
Sales price P15 per unit Variable costs: SG&A P2 per unit Production P4 per unit Fixed...
Sales price P15 per unit Variable costs: SG&A P2 per unit Production P4 per unit Fixed costs (total cost incurred for the year): SG&A P14,000 Production P20,000 During the first year, Sherrill Corporation manufactured 5,000 units and sold 3,800. There was no beginning or ending work-in-process inventory. 1. How much income before income taxes would be reported if Stanley uses absorption costing? 2. How much income before income taxes would be reported if variable costing was used? 3. Show why...
XYZ, Inc. produces a product that will sell this year for $200 per unit. Fixed costs...
XYZ, Inc. produces a product that will sell this year for $200 per unit. Fixed costs are expected to total $10,000 this year and remain constant for the following four years. Variable costs are expected to be $75 per unit this year and increase at a rate of 5% in each of the following four years. XYZ, Inc. expects to sell 2,000 units this year and in each of the following four years. To earn an equivalent uniform annual gross...
Huntzburger products sells a product for $75. variable costs per unit are $50 and monthly fixed...
Huntzburger products sells a product for $75. variable costs per unit are $50 and monthly fixed costs are $75000. answer following questions. a) what is break even points in units? b) what unit sales would be required to earn a profit target of $200,000 c) assume they achieve the sales required in part b what is the degree of operating leverage? d) if sales decrease by 30% from that level by what percentage will profits decrease?
Cantor Products sells a product for $75. DM costs per unit and DL costs per unit...
Cantor Products sells a product for $75. DM costs per unit and DL costs per unit are $45. Depreciation Expenses costs and Production supervisor’s salary are $75,000. Answer the following questions: a. What is the break-even point in units? b. What unit sales would be required to earn a target profit of $200,000? c. Assume they achieve the level of sales required in part b, what is the degree of operating leverage? d. If sales decrease by 30% from that...
A project has the following estimated data: Price=$62 per unit; variable costs =$28 per unit; fixed...
A project has the following estimated data: Price=$62 per unit; variable costs =$28 per unit; fixed costs=$27,300; required return= 12 percent; initial investment= $34,800; life= four years. Ignoring the effect of taxes, what is the accounting break-even quantity? The cash break-even quantity? The financial break-even quantity? What is the degree of operating leverage at the financial break-even level of output?
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT