Question
In: Accounting
CVP – ABC Company The following information pertains to ABC Company and its product – Product...
CVP – ABC Company
The following information pertains to ABC Company and its product –
Product Z:
Selling Price per unit. $45.00
Direct Material Cost per kg $2.00
Direct Labour Cost per unit $1.20
Variable Overhead cost per unit $0.80
Material required per unit. 2KGS
Other variable expenses per unit. $0.60
Annual Fixed Costs:
Advertising. $15,000
Fixed Manufacturing. $60,000
Other Fixed Expenses. $8,000
Required:
-
What is the Breakeven Point in both units and sales dollars? For this you will need to calculate both the Contribution Margin and the Contribution Margin Ratio – be sure to show all your work for full points.
-
Assume the company has a target profit of $400,000, what is the breakeven point in both units and sales dollars? Show all your work.
-
If ABC company chose to discontinue advertising and instead pay $3 per unit as a commission, what would the breakeven point be in both units and sales dollars?
Solutions
ekkarill92 answered 2 years agoRelated Solutions
The following information pertains to ABC Company. Estimated netincome for 2019 = $500 Beginning retained...
The following information pertains to ABC Company. Estimated net
income for 2019 = $500 Beginning retained earnings, January 1, 2019
= $2,100 Estimated distributions to owners during 2019 = $300 What
is the company's ending balance in retained earnings at the end of
the year, December 31, 2019?
Walsh company manufactures and sells one product. The following information pertains to each of the company...
Walsh company manufactures and sells one product. The
following information pertains to each of the company s first two
years of operations.
Direct materials. 25$
Direct
labor.
10$
Variable manufacturing overhead 4$
Variable selling and administrative. 3$
Fixed manufacturing overhead. 240000$
Fixed selling and administrative expenses. 60000$
During its first year of operations , Walsh produced 50000 units
and sold 40000 units. During its second year of operations , it
produced 40000 units and sold 50000 units. The selling price...
Haas Company manufactures and sells one product. The following information pertains to each of the company�s...
Haas Company manufactures and sells one product. The following
information pertains to each of the company�s first three years of
operations:
Variable costs per unit:
Manufacturing:
Direct materials
$30
Direct labor
$22
Variable manufacturing
overhead
$6
Variable selling and administrative
$2
Fixed costs per year:
Fixed manufacturing overhead
$
540,000
Fixed selling and administrative
expenses
$
240,000
During its first year of operations, Haas produced 60,000 units
and sold 60,000 units. During its second year...
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s...
Walsh Company manufactures and sells one product. The following
information pertains to each of the company’s first two years of
operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
20
Direct labor
$
13
Variable manufacturing overhead
$
4
Variable selling and administrative
$
3
Fixed costs per year:
Fixed manufacturing overhead
$
320,000
Fixed selling and administrative expenses
$
70,000
During its first year of operations, Walsh produced 50,000 units
and sold 40,000 units. During its second year of...
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s...
Walsh Company manufactures and sells one product. The following
information pertains to each of the company’s first two years of
operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
29
Direct labor
$
15
Variable manufacturing overhead
$
3
Variable selling and administrative
$
2
Fixed costs per year:
Fixed manufacturing overhead
$
320,000
Fixed selling and administrative expenses
$
70,000
During its first year of operations, Walsh produced 50,000 units
and sold 40,000 units. During its second year of...
Haas Company manufactures and sells one product. The following information pertains to each of the company’s...
Haas Company manufactures and sells one product. The following
information pertains to each of the company’s first three years of
operations:
Variable costs
per unit:
Manufacturing:
Direct
materials
$
28
Direct
labor
$
20
Variable
manufacturing overhead
$
4
Variable selling
and administrative
$
3
Fixed costs per
year:
Fixed
manufacturing overhead
$
210,000
Fixed selling
and administrative expenses
$
150,000
During its first year of operations, Haas produced 60,000 units
and sold 60,000 units. During its second year of...
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s...
Walsh Company manufactures and sells one product. The following
information pertains to each of the company’s first two years of
operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
24
Direct labor
$
13
Variable manufacturing
overhead
$
5
Variable selling and
administrative
$
4
Fixed costs per year:
Fixed manufacturing
overhead
$
240,000
Fixed selling and administrative
expenses
$
50,000
During its first year of operations, Walsh produced 50,000 units
and sold 40,000 units. During its second year of...
Haas Company manufactures and sells one product. The following information pertains to each of the company’s...
Haas Company manufactures and sells one product. The following
information pertains to each of the company’s first three years of
operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
30
Direct labor
$
22
Variable manufacturing overhead
$
6
Variable selling and administrative
$
2
Fixed costs per year:
Fixed manufacturing overhead
$
540,000
Fixed selling and administrative expenses
$
240,000
During its first year of operations, Haas produced 60,000 units
and sold 60,000 units. During its second year of...
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s...
Walsh Company manufactures and sells one product. The following
information pertains to each of the company’s first two years of
operations:
Variable costs per unit:
Manufacturing:
Direct materials
$
21
Direct labor
$
14
Variable manufacturing
overhead
$
2
Variable selling and
administrative
$
1
Fixed costs per year:
Fixed manufacturing
overhead
$
240,000
Fixed selling and administrative
expenses
$
80,000
During its first year of operations, Walsh produced 50,000 units
and sold 40,000 units. During its second year of...
Ogilvy Company manufactures and sells one product. The following information pertains to each of the company’s...
Ogilvy Company manufactures and sells one product. The following
information pertains to each of the company’s first three years of
operations:
Variable cost per unit:
Direct materials
$
30
Fixed costs per year:
Direct labor
$
1,702,000
Fixed manufacturing overhead
$
836,000
Fixed selling and administrative expenses
$
290,000
The company does not incur any variable manufacturing overhead
costs or variable selling and administrative expenses. During its
first year of operations, Ogilvy produced 74,000 units and sold
74,000 units. During...
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