Question
In: Finance
The Annual Fixed Costs for a production unit are $2,000,000. Variable Costs are related to Production Quantity as: Variable Costs = $15 + $.006 × Production Quantity
The Annual Fixed Costs for a production unit are $2,000,000. Variable Costs are related to Production Quantity as: Variable Costs = $15 + $.006 × Production Quantity. The Total Annual Cost = Fixed Costs + Variable Costs × Production Quantity. If the price of 1 produced part is $150;
a) Determine the Production Quantity that will minimize the Unit Cost of a produced part, and calculate the Annual Profit generated at this Production Quantity.
b) Determine the Production Quantity that will maximize the Annual Profit, and calculate the Annual Profit generated by the plant at this Production Quantity
Solutions
jeff jeffy answered 2 years agoRelated Solutions
Fixed costs are P10 per unit and variable costs are P25 per unit. Production was 13,000...
Fixed costs are P10 per unit and variable costs are P25 per
unit. Production was 13,000 units, while sales
were 12,000 units. Determine (a) whether variable cost income from
operations is less than or greater
than absorption costing income from operations, and (b) the
difference in variable costing and absorption
costing income from operations.
1) Suppose that a company has fixed costs of $15 per unit and variable costs $11...
1) Suppose that a company has fixed costs of $15 per unit and
variable costs $11 per unit when 15,500 units are produced. What
are the fixed costs per unit when 11,000 units are produced?
2)Total costs for ABC Distributing are $240,000 when the
activity level is 9,000 units. If variable costs are $3.0 per unit,
what are their fixed costs?
3)Park and West, LLC, provides consulting services to retail
merchandisers in the Midwest. In 2019, they generated $750,000 in...
Variable Costing—Production Exceeds Sales Fixed manufacturing costs are $37 per unit, and variable manufacturing costs are...
Variable Costing—Production Exceeds Sales
Fixed manufacturing costs are $37 per unit, and variable
manufacturing costs are $111 per unit. Production was 91,000 units,
while sales were 86,450 units.
a. Determine whether variable costing income
from operations is less than or greater than absorption costing
income from operations.
b. Determine the difference in variable costing
and absorption costing income from operations.
$
Variable Direct Costs Machine Hours Fixed Production Costs Fixed Overhead Costs Units Sold Unit Selling price...
Variable Direct Costs
Machine Hours
Fixed Production Costs
Fixed Overhead Costs
Units Sold
Unit Selling price
Machine Hours per
Unit
Total Sales Dollars
Variable Cost per
Unit
Total Contribution
Dollars
Contribution Dollars per
Unit
Contribution Margin
Percentage
Item #1
$65,000
10000
$25,000
$2,000
22500
$10
Item #2
$55,000
20000
$22,000
$2,500
23000
$8
Item #3
$42,000
7500
$15,000
$1,750
27500
$7
Item #4
$27,000
5000
$5,000
$500
11000
$6
Complete the grey cells in the
above table
Which product
would...
Variable Direct Costs Machine Hours Fixed Production Costs Fixed Overhead Costs Units Sold Unit Selling price...
Variable Direct Costs
Machine Hours
Fixed Production Costs
Fixed Overhead Costs
Units Sold
Unit Selling price
Machine Hours per
Unit
Total Sales Dollars
Variable Cost per
Unit
Total Contribution
Dollars
Contribution Dollars per
Unit
Contribution Margin
Percentage
Item #1
$65,000
10000
$25,000
$2,000
22500
$10
Item #2
$55,000
20000
$22,000
$2,500
23000
$8
Item #3
$42,000
7500
$15,000
$1,750
27500
$7
Item #4
$27,000
5000
$5,000
$500
11000
$6
Complete the grey cells in the
above table
Which product
would...
Beano Ltd manufactures beanbags. The company’s variable costs are $15 per unit and fixed operating costs...
Beano Ltd manufactures beanbags. The company’s variable costs
are $15 per unit and fixed operating costs are $2.1 million
annually. The beanbags are sold for $45 each.
Required
a What is Beano Ltd’s break-even
point in units?
What is Beano Ltd’s break-even point in sales dollars? Confirm
your answer using an alternative method.
What is Beano Ltd’s degree of operating leverage (DOL) if sales
are 85,000 units for the year?
What is Beano Ltd’s EBIT if sales are 62,500 units...
New Berlin Corporation has annual fixed costs of $800,000, variable costs of $48 per unit, and...
New Berlin Corporation has annual fixed costs of $800,000,
variable costs of $48 per unit, and a contribution margin ratio of
40 percent.
a. Compute the unit sales price and unit contribution margin for
the above product.
b. Compute the sales volume in units required for New Berlin
Corporation to earn an operating income of $600,000.
c. Compute the dollar sales volume required for New Berlin
Corporation to earn an operating income of $600,000.
if fixed costs are $728,400, the unit selling price is $42, and the unit variable costs...
if fixed costs are $728,400, the unit selling price is $42, and
the unit variable costs are $27, what is the break-even sales
(units) if target profits are increased by $330,930?
A) 26,498
B) 22,062
C) 48,560
D) 70,622
if the contribution margin ratio for 4 Zsons Company is 30%,
sales were $843,000 and fixed costs were $113,295, what was the
income from operations?
A) 252,900
B) 139,605
C) 158,200
D) 377,650
Period Costs:
A) are expensed as costs are...
If fixed costs are $247,000, the unit selling price is $116, and the unit variable costs...
If fixed costs are $247,000, the unit selling price is $116, and
the unit variable costs are $73, what are the break-even sales in
units (rounded to a whole number)?
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...
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