A company manufactures high-quality, lightweight racing bicycles. Thevariable cost per bicycle is £396 and they retail for £900 each. Last yearthe company sold 750 bicycles and made a profit of £350,000.Based on the above data, what were the fixed costs at the company?A) 350,000B) 28,000C) 378,000|

SolutionWe are given the following informationSelling Price per bicycle = £ 900Variable costs per…

Answered: A company manufactures high-quality,…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 19E: A company is spending 70,000 per year for inspecting, 60,000 per year for purchasing, and 56,000 per...

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Similar questions

A company is spending 70,000 per year for inspecting, 60,000 per year for purchasing, and 56,000 per year for reworking products. What is a good estimate of non-value-added costs? a. 126,000 b. 70,000 c. 56,000 d. 130,000
Deuce Sporting Goods manufactures a high-end model tennis racket. The company’s forecasted income statement for the year, before any special orders, is as follows: Fixed costs included in the forecasted income statement are $400,000 in manufacturing cost of goods sold and $200,000 in selling expenses. A new client placed a special order with Deuce, offering to buy 1,000 tennis rackets for $100.00 each. The company will incur no additional selling expenses if it accepts the special order. Assuming that Deuce has sufficient capacity to manufacture 1,000 more tennis rackets, by what amount would differential income increase (decrease) as a result of accepting the special order? (Hint: First compute the variable cost per unit relevant to this decision.)
Suppose that a company is spending 60,000 per year for inspecting, 30,000 for purchasing, and 40,000 for reworking products. A good estimate of nonvalue-added costs would be a. 70,000. b. 130,000. c. 40,000. d. 90,000. e. 100,000.
Markson and Sons leases a copy machine with terms that include a fixed fee each month plus acharge for each copy made. Markson made 9,000 copies and paid a total of $480 in January. In April, they paid $320 for 5,000 copies. What is the variable cost per copy if Markson uses the high-low method to analyze costs?
Gelbart Company manufactures gas grills. Fixed costs amount to 16,335,000 per year. Variable costs per gas grill are 225, and the average price per gas grill is 600. Required: 1. How many gas grills must Gelbart Company sell to break even? 2. If Gelbart Company sells 46,775 gas grills in a year, what is the operating income? 3. If Gelbart Companys variable costs increase to 240 per grill while the price and fixed costs remain unchanged, what is the new break-even point?
Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90. The companys monthly fixed expenses are $180,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of October when they will sell 10,000 units. How many units will Cadre need to sell in order to realize a target profit of $300,000? What dollar sales will Cadre need to generate in order to realize a target profit of $300,000? Construct a contribution margin income statement for the month of August that reflects $2,400,000 in sales revenue for Cadre, Inc.
A company that sells radios has yearly fixed costs of $600,000. It costs the company $45 to produce each radio. Each radio will sell for $65. The company’s costs and revenue are modeled by the functions (see attached), where x represents the number of radios produced and sold. Then find and interpret (R - C)(20,000), (R - C)(30,000), and(R - C)(40,000).
It costs the American Automobile Company $8,000 to produce each automobile, and fixed costs (rent and other expenses that do not depend on the amount of production) are $15,000 per week. The company’s price function is , where p is the price at which exactly x cars will be sold. a) How many cars should be produced each week to maximize profit? b) For what price should they be sold? c) What is the company’s maximum profit?
Bernard Tires sells tires to car dealerships for an average of $30 each. The variable cost of each tire is $20, and monthly fixed manufacturing costs total $10,000. Other monthly fixed costs of the company total $8,000. Assuming sales total $60,000, what is the margin of safety?
Farmer Co. manufactures and sells widgets to the students at Texas A&M University. The widgets have a selling price of $10 per widget. It costs Farmer Co. $6.00 in variable costs to manufacture each widget. Altogether the company incurs $100,000 in fixed costs. This year the company had sales of $275,000. How many additional units did Farmer Co. sell above its breakeven point?(A) 25,000(B) 1,500 (C) 2,500(D) 3,000
A shoe manufacturer produces a pair of shoes at a labor cost of P10.00 + (01/100) and material cost of P25.00 + (01/100). The fixed charges on the business are P15,000 a month and variable costs are P2.00 a pair. If the shoes sell to retailers for P50.00 a pair, how many pairs must be produced and sold each month for the manufacturer to break even?Kindly provide a COMPLETE and CLEAR solution.
A local manufacturer produces a single product that has a selling price of $25.00 per unit. Fixed expenses total $50,000 per year, and the company must sell 10,000 units to break even. If the company has a target profit of $15,000, how many units must be sold?

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