Question

In: Accounting

Cool Gafitas Inc. sells sunglasses. Last year the glasses sold for $ 35 each, with variable...

Cool Gafitas Inc. sells sunglasses. Last year the glasses sold for $ 35 each, with variable costs per goggle of $ 26 and fixed operating costs of $ 25,000. How many glasses does Cool Glasses have to sell this year to break even considering the aforementioned costs, given the following scenarios?
All numbers remain the same as last year. (3 points)
Fixed operating costs increase to $ 28,000, other items remain the same. (3 points)
The sale price is increased to $ 37, all costs remain the same as last year. (3 points)
The variable cost per glasses increases to $ 28., The other items remain the same as last year. (3 points)

Solutions

Expert Solution

Dear Student,
Detailed solution is provided in the image format, please go through the image.
Thank you


Related Solutions

Cool Gafitas Inc. sells sunglasses. Last year the glasses sold for $ 35 each, with variable...
Cool Gafitas Inc. sells sunglasses. Last year the glasses sold for $ 35 each, with variable costs per goggle of $ 26 and fixed operating costs of $ 25,000. How many glasses does Cool Glasses have to sell this year to break even considering the aforementioned costs, given the following scenarios? All numbers remain the same as last year. (3 points) Fixed operating costs increase to $ 28,000, other items remain the same. (3 points) The sale price is increased...
Jason, Inc. sold 90,000 units last year for $2.50 each. Variable costs per unit were $0.30...
Jason, Inc. sold 90,000 units last year for $2.50 each. Variable costs per unit were $0.30 for direct materials, $0.50 for direct labor, and $0.30 for variable overhead. Fixed costs were $60,000 in manufacturing overhead and $40,000 in nonmanufacturing costs. a. What is the total contribution margin? b. What is the unit contribution margin? c. What is the contribution margin ratio? d. If sales increase by 15,000 units, by how much will profits increase?
Orion, Inc. sold 17,000 units last year for $50 each. Variable costs per unit were $20...
Orion, Inc. sold 17,000 units last year for $50 each. Variable costs per unit were $20 for direct materials, $15 for direct labor, and $10 for variable overhead. Fixed costs were $10,000 in manufacturing overhead and $50,000 in nonmanufacturing costs. a. What is the total contribution margin? b. What is the unit contribution margin? c. What is the contribution margin ratio? d. If sales increase by 5,000 units, by how much will profits increase?
Question #1: Orion, Inc. sold 17,000 units last year for $50 each. Variable costs per unit...
Question #1: Orion, Inc. sold 17,000 units last year for $50 each. Variable costs per unit were $20 for direct materials, $15 for direct labor, and $10 for variable overhead. Fixed costs were $10,000 in manufacturing overhead and $50,000 in nonmanufacturing costs. a. What is the total contribution margin? b. What is the unit contribution margin? c. What is the contribution margin ratio? d. If sales increase by 5,000 units, by how much will profits increase? Question #2: Acme Company...
Knight Shades Inc. is considering adding new line of sunglasses to their designer series. The glasses...
Knight Shades Inc. is considering adding new line of sunglasses to their designer series. The glasses will sell for $1,300 per pair and have a variable cost of $500 per unit. The company has spent $104,000 for a marketing study that estimates the company will sell 80,000 sunglasses per year for seven years. The fixed costs each year to produce the sunglasses will be $5,180,000. The company has also spent $622,000 on research and development for the new glasses. The...
Mod Inc. sells parts for $80 each. Fixed costs are $1,200 per year and variable costs...
Mod Inc. sells parts for $80 each. Fixed costs are $1,200 per year and variable costs are $65 per unit. If the initial investment is $6,600 and is expected to last for 5 years and the firm pays 35% taxes, what is the accounting and economic break-even level of sales respectively? The initial investment will be depreciated straight-line over 5 years to a final value of zero, and the discount rate is 12%.
Mod Inc. sells parts for $125 each. Fixed costs are $1,800 per year and variable costs...
Mod Inc. sells parts for $125 each. Fixed costs are $1,800 per year and variable costs are $80 per unit. If the initial investment is $10,000 and is expected to last for 8 years and the firm pays 35% taxes, what is the accounting and economic break-even level of sales respectively? The initial investment will be depreciated straight-line over 8 years to a final value of zero, and the discount rate is 12%.Please show all work!
Baird Corporation sells hammocks; variable costs are $72 each, and the hammocks are sold for $133...
Baird Corporation sells hammocks; variable costs are $72 each, and the hammocks are sold for $133 each. Baird incurs $373,200 of fixed operating expenses annually. Required a1. Determine the sales volume in units and dollars required to attain a $66,000 profit. a2. Prepare an income statement using the contribution margin format. b. Baird is considering implementing a quality improvement program. The program will require a $10 increase in the variable cost per unit. To inform its customers of the quality...
Cami Cakes sells cakes and pies. Last year it sold on an average of 1,000 cakes...
Cami Cakes sells cakes and pies. Last year it sold on an average of 1,000 cakes per month and had the following average monthly total costs:( Rent $1,000 Materials 10,000 Hourly labor for production 8,000 Manager's salary 3,000 The normal selling price is $25.00 per cake, and Cami usually sells 1,000 cakes per month. Wal-Mart has offered to pay Cami's $20.00 per cake to supply them with 500 cakes during the next month. (Assume that this is a one-time sale...
GoSnow sells snowboards. Each snowboard requires direct materials of $110, direct labor of $35, and variable...
GoSnow sells snowboards. Each snowboard requires direct materials of $110, direct labor of $35, and variable overhead of $45. The company expects fixed overhead costs of $265,000 and fixed selling and administrative costs of $211,000 for the next year. The company has a target profit of $200,000. It expects to produce and sell 10,000 snowboards in the next year. compute the selling price using variable costs methos
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT