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In: Finance
(Break-even point and operating leverage) Footwear Inc. manufactures a complete line of men's and women's dress...
(Break-even point and operating leverage) Footwear Inc. manufactures a complete line of men's and women's dress shoes for independent merchants. The average selling price of its finished product is $85 per pair. The variable cost for this same pair of shoes is $50 . Footwear Inc. incurs fixed costs of $190 comma 000 per year. a. What is the break-even point in pairs of shoes sold for the company? b. What is the dollar sales volume the firm must achieve to reach the break-even point? c. What would be the firm's profit or loss at the following units of production sold: 5 comma 000 pairs of shoes? 12 comma 000 pairs of shoes? 18 comma 000 pairs of shoes?
Solutions
jeff jeffy answered 2 years agoRelated Solutions
(Break-even point and operating leverage) Footwear Inc. manufactures a complete line of men's and women's dress...
(Break-even
point and operating
leverage)
Footwear Inc. manufactures a complete line of men's and
women's dress shoes for independent merchants. The average selling
price of its finished product is
$75
per pair. The variable cost for this same pair of shoes is
$65
.
Footwear Inc. incurs fixed costs of
$170 comma 000
per year.
a. What is the break-even point in pairs of shoes sold for the
company?
b. What is the dollar sales volume the firm must achieve...
(Break-even point and operating leverage) Footwear Inc. manufactures a complete line of men's and women's dress...
(Break-even point and operating leverage)
Footwear Inc. manufactures a complete line of men's and
women's dress shoes for independent merchants. The average selling
price of its finished product is $95 per pair. The variable cost
for this same pair of shoes is $50. Footwear Inc. incurs fixed
costs of $180,000 per year.
a. What is the break-even point in pairs of shoes sold for the
company?
b. What is the dollar sales volume the firm must achieve to
reach the...
(Break-even point and operating leverage) Footwear Inc. manufactures a complete line of men's and women's dress...
(Break-even
point and operating
leverage)
Footwear Inc. manufactures a complete line of men's and
women's dress shoes for independent merchants. The average selling
price of its finished product is
$85
per pair. The variable cost for this same pair of shoes is
$60
.
Footwear Inc. incurs fixed costs of
$180 comma 000
per year.
a. What is the break-even point in pairs of shoes sold for the
company?
b. What is the dollar sales volume the firm must achieve...
12.4 (Break even point and operating leverage) King Inc. is a health wine company in China....
12.4 (Break even point and operating leverage) King Inc.
is a health wine company in China. The average selling price of its
finished product is 38 Chinese Yuan Renminbi per bottle (500ml/
bottle). The variable cost of the same bottle of wine is RMB 15.
King Inc. incurs fixed costs of RMB 175 million per
year.
What is the break even point in bottles of health wine
for the company?
What is the RMB sales volume the firm must achieve...
Explain how the break-even point and operating leverage are affected by the choice of manufacturing facilities...
Explain how the break-even point and operating leverage
are affected by the choice of manufacturing facilities (Labor
intensive versus capital intensive).
OPERATING LEVERAGE Riyadh Company manufactures a complete line of electronics. The average selling price for the...
OPERATING
LEVERAGE
Riyadh Company
manufactures a complete line of electronics. The average selling
price for the various products is SAR 715. The associated variable
cost is SAR 475 per unit. Fixed costs for the firm averay SAR
225,000 annually.
a. What is the
break-even point in units for the company?
b. What is the
dollar sales volume the firm must achieve to reach the break-even
point?
c. What is the
degree of operating leverage (i.e., the ratio of the percent...
Contribution Margin, Break-Even Units, Break-Even Sales, Margin of Safety, Degree of Operating Leverage Aldovar Company produces...
Contribution Margin, Break-Even Units, Break-Even Sales, Margin
of Safety, Degree of Operating Leverage
Aldovar Company produces a variety of chemicals. One division
makes reagents for laboratories. The division's projected income
statement for the coming year is:
Sales (203,000 units @ $70)
$14,210,000
Total variable cost
8,120,000
Contribution margin
$6,090,000
Total fixed cost
4,945,500
Operating income
$1,144,500
Required:
1. Compute the contribution margin per unit,
and calculate the break-even point in units. Calculate the
contribution margin ratio and use it to...
Break-Even Point
S.S Corporation had sales of Rs. 4,500,000. The fixed expense was Rs. 1,200,000 and variable expense totaled Rs. 1,800,000. You are required to calculate Break-Even Point for S.S Corporation.
how does the break-even point fit into this discussion? What is the break-even point? Why is...
how does the break-even point fit into this discussion? What is
the break-even point? Why is it an important concept in managerial
accounting? What are its uses?
Break-Even Units, Contribution Margin Ratio, Multiple-Product Breakeven, Margin of Safety, Degree of Operating Leverage Jellico Inc.'s...
Break-Even Units, Contribution Margin Ratio, Multiple-Product
Breakeven, Margin of Safety, Degree of Operating Leverage
Jellico Inc.'s projected operating income (based on sales of
450,000 units) for the coming year is as follows:
Total
Sales
$ 9,450,000
Total variable cost
5,575,500
Contribution margin
$ 3,874,500
Total fixed cost
2,625,189
Operating income
$ 1,249,311
Required:
1(a). Compute variable cost per unit. Enter
your answer to the nearest cent.
$per unit
1(b). Compute contribution margin per unit.
Enter your answer to the nearest...
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