2. Given the following information: The ratio of variable cost per unit divided by selling price per unit equals 0.25 Fixed Costs Amount to $50,000 a. What is the Break-even point b. What effect would a 6% decrease selling price have on the break even point from part a?

2. Given the following information: The ratio of variable cost per unit divided by selling price per unit equals 0.25 Fixed Costs Amount to $50,000 a. What is the Break-even point b. What effect would a 6% decrease selling price have on the break even point from part a?

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 13E

See similar textbooks

Related questions

Q: he selling price of a particular product is $37.00 per unit, fixed costs total $225,600, and the…

A: Break even sales = Fixed costs/Contribution margin ratio Contribution margin ratio = Fixed…

Q: Assume the selling price per unit is $30, the contribution margin ratio is 40%, and thetotal fixed…

A: Break even point (BEP): Breakeven is the point where total expenses are equal to total revenue. at…

Q: Assume a sales price per unit of $25, variable cost per unit $21, and total fixed costs of $154560.…

A: Contribution margin per unit = Selling price - Variable cost Contribution margin ratio =…

Q: 2. What is the expected contribution margin ratio? Round to the nearest whole percent. % 3.…

A: Contribution Margin is the difference between Sales and Variable Cost. Break Even Point is a point…

Q: 1. Calculate the marginal contribution ratio if sales is R30 per unit, variable cost is R10 per…

A: Variable cost means the cost which vary with the level of output and fixed cost means the cost which…

Q: If fixed costs are $793,000 and variable costs are 63% of sales, what is the break-even point in…

A: The answer for above question is given below:

Q: Rooney Company reported the following data regarding the product it sells: Sales price Contribution…

A: Break-even analysis is a technique widely used by the production department. It helps to determine…

Q: If the selling price per unit is $50, the variable expense per unit is $20, and total fixed expenses…

A: Contribution margin ratio = Contribution margin / Selling price = ($50 - $20) / $50 = 60%

Q: 1. What are the variable expenses per case? 2. What is the break-even point in units? 3. What amount…

A: Break-Even Point:It is the level of sales achieved by the firm where profit is zero. Hence all the…

Q: Calculate Break-Even Point sales, when total sales, total variable costs and fixed costs are…

A: Contribution margin = Sales - Variable expenses = 300,000 - 200,000 = 100,000

Q: Holding other factors constant, a company's contribution margin per unit will increase with: O a.…

A: Answer

Q: Mazoon Company's variable costs are 75% of the selling price and its fixed costs are $80,00O. To…

A: Break even point means a point where firm is neither earning profit nor incurring any loss. For…

Q: 1. Consider the following: Variable cost as a percentage of sales = 60% Unit variable cost = $30…

A: Contribution means the difference between the selling price and variable cost . Fixed cost remain…

Q: If the selling price is $32 per unit, the variable cost is $24 per unit, and total fixed cost is…

A: Break-even analysis is a technique used widely by production management. It helps to determine the…

Q: ● Use the algebraic approach. If the Income Statement is: ● 2. Sales (P50 x 10,000 units) Less:…

A: Variable costs are costs which changes with change in activity level. Fixed costs do not change with…

Q: 10. If the selling price is £20 per unit, variable costs are £5 per unit and fi £9,000, the BEP…

A: Break even point is where there is no loss no profit conditions and all costs are covered and but…

Q: Given the following information. answer the questions:• The ratio of variable cost per unit divided…

A: (a) Draw the cost volume profit diagram: Units Sales ($1) Variabe costs ($0.25) Fixed costs…

Q: 4. If the marginal cost is $6.50 per unit, fixed costs to $70 000 per annum, and the selling price…

A: "Since you have asked multiple questions, we will solve first question for you. If you want any…

Q: t is 1000 TL, the unit variable cost is 2 TL, and the sales price of the product is 3 TL, what is…

A: Break Even Point -: Break Even point is simply a stage in a production when the cost or expense…

Q: a. What is the company's variable cost ratio b. How much is fixed costs of the new BES level?

A: Break even point = Fixed cost/ PV ratio. PV ratio = Sales - Cost to volume ratio. In…

Q: ● ● 1. If the variable cost is P15/unit, fixed cost is 265,000; and Sales is P55. Find the BEPs, and…

A: Break Even Point :— It is the point where there is no profit or no loss. It is point where profit is…

Q: 3. A company has return on sales of 20%, income of $50,000, selling price of $10, and a contribution…

A: Solution.. Income = $50,000 Return on sales = 20% Contribution margin ratio = 40% Selling price…

Q: Case 1. If fixed costs are $17,000,000 with breakeven units at 400,000 and the variable cost is…

A: Hey, since there are multiple requirements posted, we will answer first three requirements. If you…

Q: If fixed costs are $ 500,000, the unit selling price is $55, and the unit variable costs are $30,…

A: Break-even Point: It refers to a point in the level of operations at which a company experiences…

Q: Calculate Break-Even Point sales, when total sales, total variable costs and fixed costs are…

A: Break-even Point = Fixed Costs / Contribution Margin Ratio

Q: If fixed costs are $750,000 and variable costs are 60% of sales, what is the break-even point in…

A: Break-even point in sales dollars = Fixed Cost/Contribution Margin ratio Contribution Margin ratio =…

Q: Assume the following cost information for Standard Corporation: Selling price per unit Variable…

A: The Break-even point indicates that total units are to be sold by the business entity to recover its…

Q: calculate the break-even point using the formula R ($) = (Total $ Fixed Costs)/(%Contribution…

A: Break-even point is a level where the company incurs neither loss nor profit. It is the point, above…

Q: What is the breakeven point in unit sales and dollars for each…

A: Breakeven point: Breakeven point is the point at which the company makes no profit nor loss or it is…

Q: 1. What is the mobthly break even point in unit sales and in dollar sales ? 2. Without resorting to…

A: The units of sales made by an trading organization at which they are not earning profits but also…

Q: How many total dollars of sales must BAC Company sell to break even if the selling price per unit is…

A: Contribution margin per unit = Selling price per unit - Variable cost per unit Contribution margin…

Q: APPLY THE CONCEPTS: Use the CVP graph to analyze the effects of changes in price and costs Graph the…

A: The level/point at which the expenses of the business organizations are equal to their revenues is…

Q: 1. Calculate the contribution margin rate, the sales dollar breakeven point, and the unit sales…

A: Contribution margin the contribution of sales towards recovery of fixed costs of the company.…

Q: 2. What is the expected contribution margin ratio? Round to the nearest whole percent. 3. Determine…

A: Formula used: Break-even sales (units) = Fixed cost/ Contribution per unit Break-even sales…

Q: Zachary Company reported the following data regarding the product it sells: Sales price Contribution…

A: Break even point = Fixed cost/Contribution margin ratio

Q: If the selling price per unit is $50, the variable expense per unit is $20, and total fixed expenses…

A: The Break-even point is the point where the company is able to cover all its costs but does not make…

Q: If the selling price per unit is $80, the variable expense per unit is $40, and total fixed expenses…

A: Formula: Break even sales dollars = Break even units x Sales price per unit

Q: If fixed costs are $1,226,000, the unit selling price is $220, and the unit variable costs are $100,…

Q: Product A has a fixed cost of $5,000 and a variable cost of $5 per unit, it can sell for $20 per…

A: Break-even point is a volume of sales at which level the company’s costs of production are equal to…

Q: If fixed costs are $750,000 and variable costs are 70% of sales, what is the break-even point…

A: The break-even point is that point where the total cost is equal to the total revenue of the firm,…

Q: f the selling price is $32 per unit, the variable cost is $24 per unit, and total fixed cost is…

A: Break-even point The break-even point is a point of "no profit no loss." A business is said to be…

Q: with sales per unit of 300, variable cost per unit of 180, Total fixed cost of 75,000 and target…

A: Break even sales = fixed cost/ pv ratio

Question

2. Given the following information:
The ratio of variable cost per unit divided by selling price per unit
equals 0.25
Fixed Costs Amount to $50,000
a. What is the Break-even point
b. What effect would a 6% decrease in selling price have on the break even
point from part a?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Calculate the per-unit contribution margin of a product that has a sale price of $200 if the variable costs per unit are $65.
Delta Co. sells a product for $150 per unit. The variable cost per unit is $90 and fixed costs are $15,250. Delta Co.s tax rate is 36% and the company wants to earn $44,000 after taxes. What would be Deltas desired pre-tax income? What would be break-even point in units to reach the income goal of $44,000 after taxes? What would be break-even point in sales dollars to reach the income goal of $44000 after taxes? Create a contribution margin income statement to show that the break-even point calculated in B, generates the desired after-tax income.
A company sells its products for $80 per unit and has per-unit variable costs of $30. What is the contribution margin per unit? A. $30 B. $50 C. $80 D. $110
Contribution Margin Ratio, Break-Even Sales, Operating Leverage Elgart Company produces plastic mailboxes. The projected income statement for the coming year follows: Required: 1. Compute the contribution margin ratio for the mailboxes. 2. How much revenue must Elgart earn in order to break even? 3. What is the effect on the contribution margin ratio if the unit selling price and unit variable cost each increase by 15%? 4. CONCEPTUAL CONNECTION Suppose that management has decided to give a 4% commission on all sales. The projected income statement does not reflect this commission. Recompute the contribution margin ratio, assuming that the commission will be paid. What effect does this have on the break-even point? 5. CONCEPTUAL CONNECTION If the commission is paid as described in Requirement 4, management expects sales revenues to increase by 80,000. How will this affect operating leverage? Is it a sound decision to implement the commission? Support your answer with appropriate computations.
Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
Given the following information. answer the questions:• The ratio of variable cost per unit divided by selling price per unit equals 0.25• Fixed costs amount to $50.000(a) Draw the cost-volume-profit diagram(b) What is the break-even point?(c) What effect would a 6% decrease in selling price have on the break-eventhe point from the part (b)?
Given the following information, answer thequestions:• The ratio of variable cost per unit divided by selling price per unit equals 0.3.• Fixed costs amount to $60,000.(a) Draw the cost-volume-profit chart.(b) What is the break-even point?(c) What effect would an 8% decrease in sellingprice have on the break-even point from part (b)?
Assume the selling price per unit is $30, the contribution margin ratio is 40%, and thetotal fixed cost is $60,000. What is the break-even point in unit sales?a. 2,000b. 3,000c. 4,000d. 5,000
d) Assuming sales of 5,000 units, calculate Buggs-Off break-even point and margin of safety in units and sales dollars. e) Recompute the break-even point in units, assuming that variable costs increased by 20% and fixed costs are reduced by $50,625. How will this impact the margin of safety ratio?
A product sells for $30 per unit and has variable costs of $20 per unit. The fixed costs are $720,000. If the variable costs per unit were to decrease by 18%, if fixed costs increase to $900,000, and the selling price increases by 25%, what would be the breakeven point in units?
A product sells for $30 per unit and has variable costs of $15.75 per unit. The fixed costs are $983,250. If the variable costs per unit were to decrease to $14.80 per unit, fixed costs increase to $1,048,800, and the selling price does not change, break-even point in units would: