Suppose a firm produces and sells Apply watchbands with these values: total fixed costs of $248,500;...

Suppose a firm produces and sells Apply watchbands with these values:
total fixed costs of $248,500; variable cost per unit = $18; and selling price per unit = $49. What is the firm's break-even quantity?

Solutions

Expert Solution

Break even quantity = Fixed costs/ Contribution per unit

Contribution per unit = Selling price per unit - Variable cost per unit = $49 - $18 = $31

Break even quantity = $248,500/ $31 = 8,016 units

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

18. MHM produces lawn chairs which it sells for $40 each. Its total fixed costs are...

18. MHM produces lawn chairs which it sells for $40 each. Its total fixed costs are $2,800,000 per year, its variable costs are $18 per lawn chair, and its corporate tax rate is 25%. In a strong economy, it expects to sell 200,000 lawn chairs whereas in a weak economy, it will only 150,000 chairs. How much lower will MHM's profits be in a weak economy compared to a strong economy?

Cohen Company produces and sells socks. Variable costs are $5.40 per pair, and fixed costs for...

Cohen Company produces and sells socks. Variable costs are $5.40 per pair, and fixed costs for the year total $76,500. The selling price is $9 per pair. Required: 1. Calculate the breakeven point in units. 2. Calculate the breakeven point in sales dollars. 3. Calculate the units required to make a before-tax profit of $45,000. 4. Calculate the sales in dollars required to make a before-tax profit of $38,700. (Do not round intermediate calculations.) 5. Calculate the sales, in units...

Firm XYZ has fixed indirect costs of £100,000,000. The firm produces 1,000,000 units of product ABC....

Firm XYZ has fixed indirect costs of £100,000,000. The firm produces 1,000,000 units of product ABC. Additionally, for each unit produced, £50 of variable indirect costs are also incurred. Further, each unit produced consumes 2 direct labour hours, 5 machine hours and £20 of direct materials. The cost of 1 labour hour is £12.50 and it costs £5 per hour to run the machines. The firm also manufactures other products. In total it spends £75,000,000 on direct labour and £125,000,000...

If the price is $5.00 and Average Total Costs are $10.00 when the firm sells 100...

If the price is $5.00 and Average Total Costs are $10.00 when the firm sells 100 pizzas, find the total profits. (if you need a negative sign, it MUST be included. Type in $ format, like -$200.00)

4. Suppose that fixed cost for a firm in the automobile industry (start up costs of...

4. Suppose that fixed cost for a firm in the automobile industry (start up costs of factories, capital equipment, and so on) is $5 Billion and that the variable cost is $17,000 for each automobile produced. Because more firms increase competition in the market, the market price falls as more firms enter an automobile industry, or specifically, P = 17,000 + (150/n), where n represent the number of firms in the industry. Assume that the initial size of the automobile...

The Niendorf Corporation produces tea kettles, which it sells for $15 each. Fixed costs are $700,000...

The Niendorf Corporation produces tea kettles, which it sells for $15 each. Fixed costs are $700,000 for output up to 400,000 units. Variable costs amount to $10 per kettle. a. What is the firm's gain or loss at sales of 125,000 units? of 175,000 units? b. What is the breakeven point? Illustrate your answer with a graph. c. What is Niendorf's degree of operating leverage at sales of 150,000 units? Of 175,000 units?

Calico Joe Fabrics sells a single product. The company estimates total fixed costs at $360,000 with...

Calico Joe Fabrics sells a single product. The company estimates total fixed costs at $360,000 with demand and unit variable costs at various activity levels as follows: Units Demanded Unit Price Total Variable Costs 73,000 $31 $1,606,000 83,000 30 1,826,000 93,000 29 2,046,000 103,000 28 2,266,000 113,000 27 2,486,000 How much profit will Calico Joe Fabrics have if a price of $26 is charged and demand is 120,000? $480,000 $2,760,000 $3,120,000 $120,000

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.

If a firm produces nothing, _ costs are zero, and the firm will incur _ costs....

If a firm produces nothing, _____ costs are zero, and the firm will incur _____ costs. Question 32 options: variable; fixed fixed and variable; no fixed; variable opportunity; variable Column 1 displays the number of workers. Column 2 displays the total output associated with that number of worker(s). 0 0 1 10 2 25 3 38 4 47 What is the marginal productivity of the third worker? Question 31 options: 13 none of the above 38 10 True or False:...

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...

Subjects