Question

In: Accounting

Wyatt Inc., a multinational manufacturing firm involved in production of architectural millwork like custom molding, panels,...

Wyatt Inc., a multinational manufacturing firm involved in production of architectural millwork like custom molding, panels, book cases and others. Suppose that the Wyatt Inc. is involved in the production of the molding and it is expected to maintain same inventory at the end of the year as at the beginning of the year. Let us suppose the estimated fixed cost is $288, 000, and the estimated variable costs per unit are $14. Also assume that 60,000 units will be sold at price of $20 per unit (Waren). The maximum sales within the relevant range are 70,000 units. Calculate the following:

Questions

Calculate the contribution margin ratio and unit contribution margin.

Find out the break-even point in units.

Determine the margin of safety.

Draw a Cost-Volume-Profit graph and attach it to your posting

What are some things that would increase the break-even in units?

Solutions

Expert Solution

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Wyatt Inc., a multinational manufacturing firm involved in production of architectural millwork like custom molding, panels,...
Wyatt Inc., a multinational manufacturing firm involved in production of architectural millwork like custom molding, panels, book cases and others. Suppose that the Wyatt Inc. is involved in the production of the molding and it is expected to maintain same inventory at the end of the year as at the beginning of the year. Let us suppose the estimated fixed cost is $288, 000, and the estimated variable costs per unit are $14. Also assume that 60,000 units will be...
Zen Manufacturing Inc. is a multinational firm with sales and manufacturing units in 15 countries. One...
Zen Manufacturing Inc. is a multinational firm with sales and manufacturing units in 15 countries. One of its manufacturing units, in country X, sells its product to a retail unit in country Y for $304,000. The unit in country X has manufacturing costs of $152,500 for these products. The retail unit in country Y sells the product to final customers for $452,500. Zen is considering adjusting its transfer prices to reduce overall corporate tax liability. Required: 1. Assume that both...
PowerAir Inc., a subsidiary of a successful multinational manufacturing firm, supplies a key component in the...
PowerAir Inc., a subsidiary of a successful multinational manufacturing firm, supplies a key component in the assembly of residential air conditioning units. At this current stage, there are only five suppliers of this particular component, with these suppliers accounting for close to 80 percent of worldwide industry sales. On the retail side of the equation, well-known residential air conditioning units like Carrier and Trane retain a strong foothold in terms of retail sales. However, some newer Asian manufacturers have signaled...
PowerAir Inc., a subsidiary of a successful multinational manufacturing firm, supplies a key component in the...
PowerAir Inc., a subsidiary of a successful multinational manufacturing firm, supplies a key component in the assembly of residential air conditioning units. At this current stage, there are only five suppliers of this particular component, with these suppliers accounting for close to 80 percent of worldwide industry sales. On the retail side of the equation, well-known residential air conditioning units like Carrier and Trane retain a strong foothold in terms of retail sales. However, some newer Asian manufacturers have signaled...
PowerAir Inc., a subsidiary of a successful multinational manufacturing firm, supplies a key component in the...
PowerAir Inc., a subsidiary of a successful multinational manufacturing firm, supplies a key component in the assembly of residential air conditioning units. At this current stage, there are only five suppliers of this particular component, with these suppliers accounting for close to 80 percent of worldwide industry sales. On the retail side of the equation, well-known residential air conditioning units like Carrier and Trane retain a strong foothold in terms of retail sales. However, some newer Asian manufacturers have signaled...
PowerAir Inc., a subsidiary of a successful multinational manufacturing firm, supplies a key component in the...
PowerAir Inc., a subsidiary of a successful multinational manufacturing firm, supplies a key component in the assembly of residential air conditioning units. At this current stage, there are only five suppliers of this particular component, with these suppliers accounting for close to 80 percent of worldwide industry sales. On the retail side of the equation, well-known residential air conditioning units like Carrier and Trane retain a strong foothold in terms of retail sales. However, some newer Asian manufacturers have signaled...
Sinclair Manufacturing and Boswell Brothers Inc. are both involved in the production of brick for the...
Sinclair Manufacturing and Boswell Brothers Inc. are both involved in the production of brick for the homebuilding industry. Their financial information is as follows: Sinclair Boswell Capital Structure Debt @ 10% $ 1,920,000 0 Common stock, $10 per share 1,280,000 $ 3,200,000 Total $ 3,200,000 $ 3,200,000 Common shares 128,000 320,000 Operating Plan: Sales (72,000 units at $15 each) $ 1,080,000 $ 1,080,000 Variable costs 864,000 432,000 Fixed costs 0 322,000 Earnings before interest and taxes (EBIT) $ 216,000 $...
Sinclair Manufacturing and Boswell Brothers Inc. are both involved in the production of brick for the...
Sinclair Manufacturing and Boswell Brothers Inc. are both involved in the production of brick for the homebuilding industry. Their financial information is as follows: Sinclair Boswell Capital Structure Debt @ 11% $ 1,080,000 0 Common stock, $10 per share 720,000 $ 1,800,000 Total $ 1,800,000 $ 1,800,000 Common shares 72,000 180,000 Operating Plan: Sales (58,000 units at $20 each) $ 1,160,000 $ 1,160,000 Variable costs 928,000 580,000 Fixed costs 0 308,000 Earnings before interest and taxes (EBIT) $ 232,000 $...
Sinclair Manufacturing and Boswell Brothers Inc. are both involved in the production of brick for the...
Sinclair Manufacturing and Boswell Brothers Inc. are both involved in the production of brick for the homebuilding industry. Their financial information is as follows: Sinclair Boswell Capital Structure Debt @ 10% $ 1,740,000 0 Common stock, $10 per share 1,160,000 $ 2,900,000 Total $ 2,900,000 $ 2,900,000 Common shares 116,000 290,000 Operating Plan: Sales (69,000 units at $15 each) $ 1,035,000 $ 1,035,000 Variable costs 828,000 414,000 Fixed costs 0 319,000 Earnings before interest and taxes (EBIT) $ 207,000 $...
Sinclair Manufacturing and Boswell Brothers Inc. are both involved in the production of tile for the...
Sinclair Manufacturing and Boswell Brothers Inc. are both involved in the production of tile for the home-building industry. Their financial information is as follows: Capital Structure Sinclair Boswell   Debt @ 12% $1,320,000    0      Common stock, $10 per share 880,000    $2,200,000        $2,200,000    $2,200,000      Common shares 88,000    220,000    Operating Plan   Sales (62,000 units at $25 each) $1,550,000    $1,550,000        Less: Variable costs 1,116,000    744,000    ($18 per unit)   ($12 per unit)  ...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT