Following information related to Novel limited is provided. Selling Price 80 per unit Variable Manufacturing Cost 28 per unit Variable Selling cost 12 per unit Fixed Factory Overheads 5, 40,000 per year Fixed Selling Cost is 252,000 per year You are required to calculate the followings: i. Break Even point in units and Rupees ii. PV ratio ii. Number of units that must be sold to earn a profit of ? 60,000 per year

Following information related to Novel limited is provided. Selling Price 80 per unit Variable Manufacturing Cost 28 per unit Variable Selling cost 12 per unit Fixed Factory Overheads 5, 40,000 per year Fixed Selling Cost is 252,000 per year You are required to calculate the followings: i. Break Even point in units and Rupees ii. PV ratio ii. Number of units that must be sold to earn a profit of ? 60,000 per year

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter8: Cost Analysis

Section: Chapter Questions

Problem 5E

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The publishing company is publishing a book for business economics for which it has estimated the following total fixed and average variable cost: Total fixed cost $100,000 Average Variable Cost $ 20 Selling Price $ 30 a) Determine the breakeven output and total sales revenues. b) Determine the output that would generate a total profit of $ 60000 and total sales revenue at that output level. c) If total fixed cost reduced to $ 40,000 then what is the breakeven point. How much units they have to sale if they require to have a profit of $ 60,000. d) Find out the publisher breakeven point if fixed cost remain same at $ 100,000 but the variable cost reduced to $10. Also find out the breakeven point if profit of $60,000 has to be earned. e) Find out the breakeven and sales at required profit of $60,000 if all cost remain same but the price per unit increased to $40.
1. A service station uses 2500 oil filters during the course of a year, and this usage is constant throughout the year. These oil filters are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per oil filter per year is $1.50 (or 10% of the unit cost) and the ordering cost is $18.75. There are 250 working days per year. a) What is the service station's optimal order quantity and total annual cost of inventory?
Lulu hypermarket estimates daily demand of 18 kgs for a product. It costs RO 100 to make and receive an order, and it takes 16 workdays to receive it. The annual holding cost is 25 % of purchase price. The price RO 2 per kg. The company is operating 5 days per week, and a total of 210 workdays in one year. What is the minimum annual total holding and ordering cost in RO? Round-up to the nearest integer
A cell phone company has a fixed cost of $1,000,000 per month and a variable cost of $22 per month per subscriber. The company charges $33 per month to its cell phone customers. a.What is the annual breakeven point for this company? b. The company currently has 95,000 subscribers and proposes to raise its monthly fees to $39.95, what is the new annual break-even point if the variable cost increases to $25 per customer per month? c.lf 20,000 subscribers will drop their services because of mönthly increase in part (b), will the company still be profitable?
A seasonal bus tour firm has 5 buses with a capacity of 60 people each. Each customer pays $25 for a one-day tour. Records show $360,000 in fixed costs per season, incremental costs of $5 per customer, and an average daily occupancy of 80%. The number of days of operation necessary each season to break even is closest to which value? (a) 50 days (b) 75 days (c) 100 days (d) 120 days?
EXAMPLE 1.1 Alpha Associates has the following details:Fixed cost = Rs. 20,00,000Variable cost per unit = Rs. 100Selling price per unit = Rs. 200Find the break-even sales.
Wiebe Trucking, Inc., is planning a new warehouse to serve the western United States. Denver, Santa Fe, and Salt Lake City are under consideration. For each location, annual fixed costs (rent, equipment, and insurance) and average variable costs per shipment (labor, transportation, and utilities) are listed in the following table. Sales projections range from 550,000 to 600,000 shipments per year. Location Annual FixedCosts Variable Costsper Shipment Denver Santa Fe Salt Lake City $5,000,000 $4,200,000 $3,500,000 $4.65 $6.25 $7.25 a. Plot the total cost curves for all the locations on a single graph. b. Which city provides the lowest overall costs?
A company is analyzing a make-versus-purchase situation for a component used in several products, and the engineering department has developed these data: Option A: Purchase 10,000 items per year at a fixed price of $8.50 per item. The cost of placing the order is negligible according to the present cost accounting procedure. Option B: Manufacture 10,000 items per year, using available capacity in the factory. Cost estimates are direct materials = $5.00 per item and direct labor = $1.50 per item. Manufacturing overhead is allocated at 200% of direct labor (= $3.00 per item). Based on these data, should the item be purchased or manufactured?
Consider the following data of a company for the year 1999:Sales = Rs. 1,20,000Fixed cost = Rs. 25,000Variable cost = Rs. 45,000Find the BEP.
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.
Suppose ADI Corporation's breakeven sales volume is $450,000 with fixedcosts of $200.000.(a) Compute the contribution margin percentage.(b) Compute the selling price if va ri a ble costs are $12 per unit.
Answer all parts please Go Green is a business selling worm farm start-up kit for $12 each. This year, Go Green's fixed cost totals $110,000. The variable cost per kit is $7. a. What is the break-even point in number of kits? b. How many kits does Go Green needs to sell to earn a profit of $70,000? c. If the total fixed cost increases to $160,000 next year: i. What will Go Green's break-even point be in number of kits? ii. What profit (or loss) will Go Green have if it sells 30,000 kits? iii. How many kits will Go Green have to sell to earn a profit of $70,000?