Warner Ltd sells its only product at a price of $200 per unit. Variable costs are...

Warner Ltd sells its only product at a price of $200 per unit. Variable costs are $160 per unit and total fixed costs are $208 000. Current annual sales are 6500 units.

A. What is the company’s break-even point in sales units? , What is the break-even point in sales dollars?

B. What is the company’s margin of safety?

C. Calculate the company’s profit under the following situations. Treat each case as independent of the others. 1. Variable costs increase 10%.

2. Sales volume decreases 20%.

3. Fixed costs increase 10%.

4. Sales price increases 15%.

5. Sales price increases 20%, sales volume decreases 20%, variable costs increase 20%, and fixed costs decrease 20%.

Expert Solution

ekkarill92 answered 1 year ago

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

A certain company sells its only product for $10 per unit. The variable costs to produce...

A certain company sells its only product for $10 per unit. The variable costs to produce the product are $3 per unit and it costs approximately $1 per unit for selling and administrative costs. The fixed costs of production are $400,000 per period and the fixed selling and administrative costs are $200,000 per year. The company is subject to a 20 percent tax rate. Answer the following questions. What is the breakeven point in units? What is the breakeven point...

Company sells its product for $11700 per unit. Variable costs per unit are: manufacturing, $5500; and...

Company sells its product for $11700 per unit. Variable costs per unit are: manufacturing, $5500; and selling and administrative, $135. Fixed costs are: $30000 manufacturing overhead, and $40000 selling and administrative. There was no beginning inventory at 1/1/18. Production was 20 units per year in 2018–2020. Sales were 20 units in 2018, 16 units in 2019, and 24 units in 2020. Income under variable costing for 2019 is $27040. $33040. $35200. $60080.

Quiz Company sells its product for $10 per unit. Variable costs are $6 per unit and...

Quiz Company sells its product for $10 per unit. Variable costs are $6 per unit and fixed costs are $15,000 per week. During the third week of July, Quiz Company sold 5,000 units. 1. Determine the number of units Quiz Company must sell to earn operating income of $8,000. 2. Determine the sales revenue (in dollars) Quiz Company must generate to break even. 3. Determine the sales revenue (in dollars) Quiz Company must generate to earn operating income of $8,000....

11 Green Company sells its product for $11100 per unit. Variable costs per unit are: manufacturing,...

11 Green Company sells its product for $11100 per unit. Variable costs per unit are: manufacturing, $5600; and selling and administrative, $125. Fixed costs are: $51000 manufacturing overhead, and $61000 selling and administrative. There was no beginning inventory at 1/1/18. Production was 34 units per year in 2018–2020. Sales were 34 units in 2018, 30 units in 2019, and 38 units in 2020. Income under absorption costing for 2020 is $79650. $85250. $86250. $92250.

Chandler Company sells its product for $104 per unit. Variable manufacturing costs per unit are $45,...

Chandler Company sells its product for $104 per unit. Variable manufacturing costs per unit are $45, and fixed manufacturing costs at the normal operating level of 12,000 units are $240,000. Variable selling expenses are $15 per unit sold. Fixed administrative expenses total $104,000. Chandler had no beginning inventory in 2016. During 2016, the company produced 12,000 units and sold 9,000. Would net income for Chandler Company in 2016 be higher if calculated using variable costing or using absorption costing? Calculate...

A manufacturer produces a product that sells for $10 per unit. Variable costs per unit are...

A manufacturer produces a product that sells for $10 per unit. Variable costs per unit are $6 and total fixed costs are $12,000. At this selling price, the company earns a profit equal to 10% of total dollar sales. By reducing its selling price to $9 per unit, the manufacturer can increase its unit sales volume by 25%. Assume that there are no taxes and that total fixed costs and variable costs per unit remain unchanged. If the selling price...

Product A sells for $24.00 per unit and its variable cost is $20.00 per unit. Product...

Product A sells for $24.00 per unit and its variable cost is $20.00 per unit. Product B sells for $30.00 per unit and its variable cost is $22.80 per unit. Both products use the same machines. A total of 204,000 machine hours are available each year. Product A requires 1.0 machine hour (MH) while Product B requires 1.5 MHs. The market demand for Product A is 100,000 units and the market demand for Product B is 70,000 units. The company...

Our company sells a product for $150 per unit. Variable costs are $90 per unit and...

Our company sells a product for $150 per unit. Variable costs are $90 per unit and fixed costs are $18,000. The company expects to sell 800 units this year. How many units must we sell to break even? a) 300 b) 320 c) 360 d) 400 Our company has reviewed the utilities bills for our company. We have determined that the highest and lowest bills were $5,600 and $3,200 for the months of January and September. If we produced 1,200...

- XYZ Company sells its only product for $40 per unit. Its total fixed costs are...

- XYZ Company sells its only product for $40 per unit. Its total fixed costs are $180,000 per annum. Its CM ratio is 20%. XYZ plans to sell 16,000 units this year. Required: 1. Calculate CM per unit and the variable cost per unit. 2. Calculate break-even point in unit sales and in dollar sales? 3. Calculate the unit sales and dollar sales required to achieve a target profit of $60,000 per year? 4. Assume that the company is able...

Question