Company XYZ is an electric car manufacturer. The company produces and sells two models: Standard and Turbo. The Standard model has a selling price per unit and variable cost per unit of $8,000 and $3,000 respectively. The Turbo model has a selling price per unit and variable cost per unit of $12,000 and $5,000 respectively. The company currently has a sales mix of 2 units of Standard and 4 units of Turbo. Assuming total fixed costs of $475,000, how many units of Turbo should be sold to achieve breakeven? a. 60 b. 30 O C. None of the given answers O d. 50 e. 25

Company XYZ is an electric car manufacturer. The company produces and sells two models: Standard and Turbo. The Standard model has a selling price per unit and variable cost per unit of $8,000 and $3,000 respectively. The Turbo model has a selling price per unit and variable cost per unit of $12,000 and $5,000 respectively. The company currently has a sales mix of 2 units of Standard and 4 units of Turbo. Assuming total fixed costs of $475,000, how many units of Turbo should be sold to achieve breakeven? a. 60 b. 30 O C. None of the given answers O d. 50 e. 25

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11EA: Salvador Manufacturing builds and sells snowboards, skis and poles. The sales price and variable...

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Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals 146,000. Each door handle sells for 12 and has variable cost of 9; each trim kit sells for 8 and has variable cost of 5. Required: 1. What are the contribution margin per unit and the contribution margin ratio for door handles and for trim kits? 2. If Polaris sells 20,000 door handles and 40,000 trim kits, what is the operating income? 3. How many door handles and how many trim kits must be sold for Polaris to break even? 4. CONCEPTUAL CONNECTION Assume that Polaris has the opportunity to rearrange its plant to produce only trim kits. If this is done, fixed costs will decrease by 35,000, and 70,000 trim kits can be produced and sold. Is this a good idea? Explain.
Salvador Manufacturing builds and sells snowboards, skis and poles. The sales price and variable cost for each follows: Their sales mix is reflected in the ratio 7:3:2. If annual fixed costs shared by the three products are $196,200, how many units of each product will need to be sold in order for Salvador to break even?
Oat Treats manufactures various types of cereal bars featuring oats. Simmons Cereal Company has approached Oat Treats with a proposal to sell the company its top selling oat cereal bar at a price of $27,500 for 20,000 bars. The costs shown are associated with production of 20,000 oat bars currently. The manufacturing overhead consists of $3,000 of variable costs with the balance being allocated to fixed costs. Should Oat Treats make or buy the oat bars?
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Morris Industries manufactures and sells three products (AA, BB, and CC). The sales price and unit variable cost for the three products are as follows: Their sales mix s reflected as a ratio of 5:3:2. Annual fixed costs shared by the three products are $25,000 per year. What are total variable costs for Morris with their current product mix? Calculate the number of units of each product that will need to be sold in order for Morris to break even. What is their break-even point in sales dollars? Using an income statement format, prove that this is the break-even point.
Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all 30,000 for $240 each. Country Enterprises has approached Dimitri to buy 800 chairs for $210 each. Dimitris normal variable cost is $165 per chair, including $50 per unit in direct labor per chair. Dimitri can produce the special order on an overtime shift, which means that direct labor would be paid overtime at 150% of the normal pay rate. The annual fixed costs will be unaffected by the special order and the contract will not disrupt any of Dimitris other operations. What will be the impact on profits of accepting the order?
Company XYZ is an electric car manufacturer . The company produces and sells two models : Standard and Turbo . The Standard model has a selling price per unit and variable cost per unit of $8,000 and $3,000 respectively . The Turbo model has a selling price per unit and variable cost per unit of $12,000 and $5,000 respectively . The company currently has a sales mix of 2 units of Standard and 4 units of Turbo . Assuming tota fixed costs of $475,000 , how many units of Standard should be sold to achieve breakeven ? a . 30 b. 25 c. None of the given answers d. 50 e. 60
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