The 82194-SQ company manufactures a product that sells for $25 per unit. At present, the product is manufactured in a factory that mostly uses direct labor workers. The variable expenses are $15 per unit and the direct labor cost makes up 60% of variable expenses. Last year, the 82194-SQ company sold 50,000 units of its product and provided the following results: Sales (50,000 balls) $1,250,000 Variable expenses 750,000 500,000 Contribution margin Fixed expenses 320,000 Net operating income $ 180,000 The 82194-SQ company considers building a new and high-tech factory. The new factory would reduce variable expenses per unit by 40%, but would double the company's fixed expenses per year due to investment in fixed assets. If the new factory is built, how many units will the 82194-SQ company have to sell next year to earn the same net operating income, $180,000, as last year? (Round your answer, if necessary, to the closest number below.) Multiple Choice 52.563 units 57,000 units 58,313 units 51,250 units

The 82194-SQ company manufactures a product that sells for $25 per unit. At present, the product is manufactured in a factory that mostly uses direct labor workers. The variable expenses are $15 per unit and the direct labor cost makes up 60% of variable expenses. Last year, the 82194-SQ company sold 50,000 units of its product and provided the following results: Sales (50,000 balls) $1,250,000 Variable expenses 750,000 500,000 Contribution margin Fixed expenses 320,000 Net operating income $ 180,000 The 82194-SQ company considers building a new and high-tech factory. The new factory would reduce variable expenses per unit by 40%, but would double the company's fixed expenses per year due to investment in fixed assets. If the new factory is built, how many units will the 82194-SQ company have to sell next year to earn the same net operating income, $180,000, as last year? (Round your answer, if necessary, to the closest number below.) Multiple Choice 52.563 units 57,000 units 58,313 units 51,250 units

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 6EB: Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit...

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Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit of $360. The companys monthly fixed expenses are $72,000. 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 January when they will sell 500 units. How many units will Kerr need to sell in order to realize a target profit of $120,000? What dollar sales will Kerr need to generate in order to realize a target profit of $120,000? Construct a contribution margin income statement for the month of June that reflects $600,000 in sales revenue for Kerr Manufacturing.
Starling Co. manufactures one product with a selling price of 18 and variable cost of 12. Starlings total annual fixed costs are 38,400. If operating income last year was 28,800, what was the number of units Starling sold? a. 4,800 b. 6,400 c. 5,600 d. 11,200
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