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- A small company manufactures a certain product. Variable costs are $20 per unit and fixed costs are $10,875. The price demand relationship for this product is P = -0.25D + 250, where P is the unit sales price of the product and D is the annual demand. Total cost = fixed cost + Variable cost, TC = CF + CV Revenue = Demand x Price, TR = D x P Profit = Total Revenue – Total Cost, P = TR – TC a) Develop the equations for the total cost and total revenue. b) Find the breakeven quantity c) How many units must be sold to maximize profit? d) What is the company’s maximum profit?Using the Profit data create a two-way Data Table that calculates the profit using labor cost per item ranging from $5 to $7 with $0.2 increments and quantity from 1500 to 2500 units with 100-unit increments. Assumptions: Fixed cost: $ 5,000.00 Material costs per item: $ 2.25 Labor costs per item: $ 6.50 Shipping costs per 100 items: $ 200.00 Price per item: $ 12.99Q.(i) . Selling Price :Rs. 12 Per UnitVariable Cost : 2/3 of SPFixed Cost :Rs. 40,000You are required to calculate:(a) Sales to earn profit of Rs. 8000.(b) Also show the BEPs in Breakeven chart. Q.(ii). Use the following information and explain that how the reduction in selling pricewould affect the MOS?Particulars Rs.Selling price per unit 40Material per unit 12Labour per unit. 8Variable Overheads per unit 4Total Fixed cost is Rs. 8, 000. Full capacity of the Plant is 5, 000 units.Reduced selling price is Rs. 32 per unit.
- BVM manufactured and sold 25,000 small statues this past year. At that volume, the firm was exactly in a breakeven situation in terms of profitability. BVM’s unit costs are expected to increase by 30% next year. What additional information is needed to determine how much the production volume/sales would have to increase next year to just break even in terms of profitability? (a) Costs per unit (b) Sales price per unit and costs per unit (c) Total fixed costs, sales price per unit, and costs per unit (d) No data is needed, the volume increase is 25, 000 + 25, 000(0.30) = 32, 500 units.A company's unit costs based on 500,000 units are: Variable costs $32 Fixed costs 20 The normal unit sales price per unit is $110. A special order from a foreign company has been received for 4,000 units at $90 a unit. In order to fulfill the order, 2,000 units of regular sales would have to be foregone. The opportunity cost associated with this order is A) $64,000. B) $180,000. C) $220,000. D) $156,000.Martinez Company's relevant range of production is 7,500 units to 12,500 units. The unit costs when it produces and sells 10,000 units are provided in the table. If 12,500 units are sold, what is the variable cost per unit sold? Amount per unit ($) Direct materials 6.00 Direct Labor 3.50 Variable manufacturing overhead 1.50 Fixed manufacturing overhead 4.00 Fixed selling expense 3.00 Fixed administrative expense 2.00 Sales commissions 1.00 Variable adminsitrative expense 0.50
- The costs of producing a commodity consist of ₱102.00 per unit for labor and material cost and ₱54.00 per unit for other variable cost. The fixed cost per month amounts to ₱850,000. The commodity is sold at ₱740.00 each, what is the break-even quality per month? (Hint: for Break-even quality, COST = REVENUE)NUBD, is beginning the production of a new product. Management believes that 500 labor hours will be required to complete the new unit. An 85 percent incremental unit-time learning curve model for direct labor hours is assumed to be valid. Assume the q = -0.2345. What is the total hours for 3 units? a. 1,251 b. 695.61 c. 786.87 d. 552.71Biwei decides to set up a small business in NYC. The start-up cost is $1000 for a license and the estimated direct cost is $4 per output. After one year, Biwei’s business becomes profitable. Sonia plans to enter the same business in thesame area. What would be the cost facing Sonia? Does she bear the same cost as Biwei?
- If engineering change order is the activity for an application of the ABC method of overhead allocation, the most reasonable cost driver(s) may be:1 – number of changes processed2 – size of the work force3 – management cost to process the change ordera. 1b. 2c. 3d. 1 and 3The fixed costs incurred by a small genetics research lab are $200,000 per year. Variable costs are 60% of the annual revenue. If annual revenue is $300,000, the annual profit/loss is most nearly which answer below? (a) $66,000 profit (b) $66,000 loss (c) $80,000 profit (d) $80,000 loss.Metters Cabinets, Inc., needs to choose a production method for its new office shelf, the Maxistand. To help accomplish this, the firm has gathered the following production cost data: Variable costs (per unit) ($) Process type Annualized fixed cost labor material energy Of plant & equip. Intermittent $1,000,000 24 26 20 Mass customization $1,190,000 30 18 12 Repetitive $1,385,000 28 15 11 Continuous $1,660,000 25 15 10 Determine the most economical…
