Nizwa Co. has the following information available for December 2019: Unit selling price of a TV unit OMR 2,000 Unit variable costs OMR 500 Total fixed costs OMR 240,000 Units sold 400 The contribution margin per unit is: Select one: O a. 240,000 b. 600,000 c. 1,500 d. None of the answers are correct e. 360,000

Nizwa Co. has the following information available for December 2019: Unit selling price of a TV unit OMR 2,000 Unit variable costs OMR 500 Total fixed costs OMR 240,000 Units sold 400 The contribution margin per unit is: Select one: O a. 240,000 b. 600,000 c. 1,500 d. None of the answers are correct e. 360,000

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section14.A: Breakeven Analysis

Problem 7P

See similar textbooks

Similar questions

The cost data for Evencoat Paint for the year 2019 is as follows: Using the high-low method, express the companys maintenance costs as an equation where x represents the gallons of paint produced. Then estimate the fixed and variable costs. Predict the maintenance costs i190,000 gallons of paint are produced. Predict the maintenance costs if 81,000 gallons of paint are produced. Using Excel, create a scatter graph of the cost data and explain the relationship between gallons of paint produced and equipment maintenance expenses.
Mario Company is considering discontinuing a product. The costs of the product consist of $20,000 fixed costs and $15,000 variable costs. The variable operating expenses related to the product total $4,000. What is the differential cost? A. $19,000 B. $15,000 C. $35,000 D. $39,000
Markham Farms reports the following contribution margin income statement for the month of August. The company has the opportunity to purchase new machinery that will reduce its variable cost per unit by $2 but will increase fixed costs by 15%. Prepare a projected contribution margin income statement for Markham Farm assuming it purchases the new equipment. Assume sales level remains unchanged.
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.)
Zena Technology sells arc computer printers for $55 per unit. Unit product costs are: A special order to purchase 15,000 arc printers has recently been received from another company and Zena has idle capacity to fill the order. Zena will incur an additional $2 per printer for additional labor costs due to a slight modification the buyer wants made to the original product. One-third of the manufacturing overhead costs is fixed and will be incurred no matter how many units are produced. When negotiating the price, what is the minimum selling price that Zena should accept for this special order?
Wellington, Inc., reports the following contribution margin income statement for the month of May. The company has the opportunity to purchase new machinery that will reduce its variable cost per unit by $10 but will increase fixed costs by 20%. Prepare a projected contribution margin income statement for Wellington, Inc., assuming it purchases the new equipment. Assume sales level remains unchanged.
Bethany Company has just completed the first month of producing a new product but has not yet shipped any of this product. The product incurred variable manufacturing costs of 5,000,000, fixed manufacturing costs of 2,000,000, variable marketing costs of 1,000,000, and fixed marketing costs of 3,000,000. Under the variable costing concept, the inventory value of the new product would be: a. 5,000,000. b. 6,000,000. c. 8,000,000. d. 11,000,000.
Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett allocates common fixed cost to Product 1 and Product 2 on the basis of sales. If Product 2 is dropped, which of the following is true? a. Sales will increase by 300,000. b. Overall operating income will increase by 2,600. c. Overall operating income will decrease by 25,000. d. Overall operating income will not change. e. Common fixed cost will decrease by 27,600.
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?
The cost data for BC Billing Solutions for the year 2020 is as follows: Using the high-low method, express the companys overtime wages as an equation where x represents number of invoices processed. Assume BC has monthly fixed costs of $3,800. Predict the overtime wages if 9,000 invoices are processed. Predict the overtime wages if 6,500 invoices are processed. Using Excel, create a scatter graph of the cost data and explain the relationship between the number of invoices processed and overtime wage expense.
Sheridan Bucket Co., a manufacturer of rain barrels, had the following data for 2019. Sales 2,200 units Sales price $75 per unit Variable costs $45 per unit Fixed costs $18,480 (a) Correct answer iconYour answer is correct. What is the contribution margin ratio? Contribution margin ratio Type your answer here 40 % eTextbook and Media Attempts: 2 of 5 used (b) What is the break-even point in dollars? Break-even point
Dhofar Company has the following information: Total Fixed cost OMR 8000 Selling price per unit OMR 20 Variable cost per unit OMR 12, What will be the correct amount of Profit when 2500 Units have been sold? Select one: a. OMR 12000 b. None of the options c. OMR 10000 d. OMR 20000 2) Power Company's income statement for 2021 is given below. If inventory balances are 5000 in 2021 and 9000 in 2020, and if accounts payables balances are 7000 in 2021 and 12000 in 2020. Which of the following is cash payments for COGS (cash inputs)? Sales 75,000 -COGS 55,000 Gross Profit 20,000 -Operating Expenses 8,000 Operating Profit 12,000 -Interest Expense 2,000 Profit before Tax 10,000 -Tax 3,000 Net Profit 7,000 Select one: a. 54000 b. 56000 c. 59000 d. 63000