The following estimates have been prepared for a project: Fixed costs: $12,600 Depreciation: $8,400 Sales price per unit: $4 Accounting break-even: 20,000 units What must be the variable cost per unit? (Round your answer to 2 decimal places.) Variable cost per unit

The following estimates have been prepared for a project: Fixed costs: $12,600 Depreciation: $8,400 Sales price per unit: $4 Accounting break-even: 20,000 units What must be the variable cost per unit? (Round your answer to 2 decimal places.) Variable cost per unit

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 13E

See similar textbooks

Related questions

Q: if a product total fixed cost is 50,000 and its variable cost is 28500 for 9500 units what should be…

A: Variable costs per unit = Total variable cost / no. of units = 28500/9500 = 3 per unit

Q: The Can-Do Co. is analyzing a proposed project. The company expects to sell 12,000 units, give or…

A: The net income is the net profit of the company earned during the period. The net income includes…

Q: At a production level of 5,600 units a project has total costs of 89,000. The variable cost per unit…

A: Given information: Units produced : 5,600 Total cost : 89,000 Variable cost : 11.20

Q: Machine A has a fixed cost of P40,000 per year and a variable cost of P6 per unit. Machine B has an…

A: At break even point Fixed cost = contribution

Q: If fixed costs are $500,000 and the unit contribution margin is $40, what is the break-even point if…

A: Formula: Break even point = Fixed cost / Contribution margin

Q: A firm is trying to decide between two location alternatives, Albany and Baltimore. Albany would…

A: Particulars Alternative A ($) Alternative B ($) Sales @ 9,000 units 450,000 432,000 Less: Labor…

Q: A company is considering a project with a breakeven point of 18,000 units. The selling price is $22…

A: Formula:

Q: Automatic Transmissions, Inc., has the following estimates for its new gear assembly project: price…

Q: 20. if fixed costs are $262,000, the unit selling price is $32, and the unit variable costs are $21,…

A: Break-even analysis is a technique widely used by the production department. It helps to determine…

Q: If fixed costs are $1,226,000, the unit selling price is $229, and the unit variable costs are $104,…

A: Break-even analysis is a technique widely used by the production department. It helps to determine…

Q: For the coming year, River Company estimates fixed costs at $109,000, the unit variable cost at $21,…

A: The break even sales are the sales where business earns no profit no loss during the period.

Q: Machine A has a fixed cost of P40,000 per year and a variable cost of P6 per unit. Machine B has an…

A: Since both machines break even at 2,000 units, total cost of both Machines will be equal at…

Q: The contribution margin per unit is P5, while the direct fixed costs are P30,000 and the allocated…

A: The break-even formula is calculated by dividing the total fixed costs associated with production by…

Q: The total fixed costs are $1,500,000 and the unit variable costs are $200,000. If the company…

A: The profit is difference between the revenue earned and fixed cost and variable cost of the product.…

Q: When studying a project, the following variable costs were estimated for a normal production…

A: The Break-even point (BEP) indicates the level of sales (in units or value) that a company should…

Q: its, a project has total costs of $95,000. The variable cost per unit is $10.80. a) What is the…

A: Total fixed costs square measure the total of all consistent, non-variable expenses an organization…

Q: The following estimates have been prepared for a project: Fixed costs: $5,400 Depreciation: $3,600…

A: Cost-volume-profit (CVP) analysis is a method of cost accounting that looks at the impact that…

Q: How do I find the contribution margin per unit when the maximum capacity with present facilities =…

A: The contribution margin can be calculated by deducting the variable cost per unit from sales price…

Q: If fixed costs are $17,000,000 with breakeven units at 400,000 and the variable cost is $17,000,000…

A: The Numerical has covered the concept of Break-Even Point. Break-Even Point is that point where the…

Q: CCC Company produce 15,000 units. It estimates the following operating costs for next year:…

A: Given that: Capital invested = $900,000 Target return on investment = 25%

Q: Process A has a fixed cost of $16,000 per year and a variable cost of $40 per unit. For process B, 5…

A: We have been given that , For process A Fixed costs = $16,000 variable costs = $40 / unit For…

Q: If fixed costs are $500,000 and the unit contribution margin is $20, the break-even point in units…

A: The break-even point (BEP) refers to a point where the revenues generated by the company is equal to…

Q: The following estimates have been prepared for a project: Fixed costs: $36,000Depreciation:…

A: Variable cost is the cost which changes with the change in the output produced. In other words, the…

Q: The manager of Dukey's Shoe Station estimates operating costs for the year will include $465,000 in…

A: Breakeven sales is that level of sales revenue at which business is only recovering it's fixed costs…

Q: If fixed costs are $ 500,000, the unit selling price is $55, and the unit variable costs are $30,…

A: Break-even Point: It refers to a point in the level of operations at which a company experiences…

Q: Rubber and Steel Company is planning to manufacture a new product. The variable manufacturing costs…

A: a. Calculate the contribution margin per unit by deducting the sum of variable cost per unit which…

Q: The fixed costs for producing 500 units of a product is RO12,000 and the variable costs are RO12.500…

A: TOTAL COST FORMULA: TOTAL COST = FIXED COST + VARIABLE COST

Q: Total costs are $180,000 when 10,000 units are produced; of this amount, variable costs are $64,000.…

A: The cost can be classified into two categories i.e fixed cost and variable cost. The FIxed cost…

Q: Frieden’s management is considering a major upgrade to the manufacturing equipment, which would…

A: The contribution income statement is the statement that shows the contribution margin and the…

Q: Analysis of a project: In determining the annual profit of a project the following information is…

A: Variable cost =10 per unit Sale price =24 per unit Profit required =140000 Fixed cost =100000 for…

Q: Total costs are $180,000 when 10,000 units are produced of this amount variable costs are $64,000…

A: Definition: Cost: The amount paid to purchase the asset, install it, and put it into operations, is…

Q: The Can-Do Co. is analyzing a proposed project. The company expects to sell 12,000 units, give or…

A: Sensitivity analysis calculates the effect on the outcome by changing one input variable at a time.

Q: What is the fixed cost per unit at the break-even point?

A: Information Provided: Production units = 8000 Selling price = 1.50P Fixed costs = 2800P Variable…

Q: Automatic Transmissions, Inc., has the following estimates for its new gear assembly project: price…

A: The best-case scenario is when the sales are highest possible with the cost lowest possible. And the…

Q: How do I find the number of units that must be sold to break-even when the maximum capacity with…

A: Break-even analysis is a technique widely used by the production department. It helps to determine…

Q: How do I find the dollar sales volume to produce an income of 864,000 before taxes when the maximum…

A: Dollar sales volume can be calculated by dividing the sum of fixed cost and target income with…

Q: When studying a project, the following variable costs were estimated for a normal production…

A: The Break-even point (BEP) indicates the level of sales (in units or value) that a company should…

Q: The fixed costs incurred by a automotive shop are $200,000 per year. Variable costs are 60% of the…

A: Variable cost = 60% of annual revenue = $300,000 x 60% = $180,000

Q: c. anticipates fixed costs of $600,000, a unit variable cost of $75, and a unit selling price of…

A: The operating profit of a corporation is the entire earnings from its core business tasks for a…

Q: The management of Lambda Corporation has received the following forecast for the next year. Sales…

Q: Suppose that a company expects the following financial results from a projectduring its first year…

A: Sales revenue $ 250 Less: Variable costs $ 80 Contribution margin per unit $ 170

Q: At the break-even point of 2600 units, variable costs are $56000, and fixed costs are $35000. How…

A: At break even level, there is no profit and no loss. Accordingly sales revenue is equal to the total…

Q: If total fixed cost is $8,000 and break even point is 4,000 units, the contribution margin per unit…

A: Break even point = 4000 units Fixed cost = $8000 Break even point in units = Fixed cost /…

Q: A. For each of the following, perform a break-even analysis showing a. an algebraic statement of i.…

A: Break-even point: Break-even point is the point of sales at which total cost is equal to total…

Q: If fixed costs are $345,000, the unit selling price is $75, and the unit variable costs are $49,…

A: The break even sales are calculated as fixed cost divided by contribution margin ratio.

Q: Total costs are $180,000 when 10,000 units are produced; of this amount, variable costs are $64,000.…

A: Calculation of fixed cost is as follows:

Question

The following estimates have been prepared for a project:
Fixed costs: $12,600
Depreciation: $8,400
Sales price per unit: $4
Accounting break-even: 20,000 units
What must be the variable cost per unit? (Round your answer to 2 decimal places.)
Variable cost
per unit

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step 5

Trending now

This is a popular solution!

Step by step

Solved in 5 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

Suppose that a company is spending 60,000 per year for inspecting, 30,000 for purchasing, and 40,000 for reworking products. A good estimate of nonvalue-added costs would be a. 70,000. b. 130,000. c. 40,000. d. 90,000. e. 100,000.
Hatch Manufacturing produces multiple machine parts. The theoretical cycle time for one of its products is 65 minutes per unit. The budgeted conversion costs for the manufacturing cell dedicated to the product are 12,960,000 per year. The total labor minutes available are 1,440,000. During the year, the cell was able to produce 0.6 units of the product per hour. Suppose also that production incentives exist to minimize unit product costs. Required: 1. Compute the theoretical conversion cost per unit. 2. Compute the applied conversion cost per minute (the amount of conversion cost actually assigned to the product). 3. Discuss how this approach to assigning conversion cost can improve delivery time performance. Explain how conversion cost acts as a performance driver for on-time deliveries.
The following estimates have been prepared for a project: Fixed costs: $36,000Depreciation: $24,000Sales price per unit: $4Accounting break-even: 40,000 units What must be the variable cost per unit? (Round your answer to 2 decimal places.)
The following estimates have been prepared for a project: Fixed costs: $5,400 Depreciation: $3,600 Sales price per unit: $3 Accounting break-even: 50,000 units What must be the variable costper unit?
At a production level of 6,500 units, a project has total costs of $95,000. The variable cost per unit is $10.80. a) What is the amount of the total fixed costs? b) If the production level is increased to 7,000 units, without any change in the total fixed assets, what is the Total Costs?
Appalachian Crafts is analyzing a project with expected sales of 18,900 units, ±2 percent. The expected variable cost per unit is $23 and the expected fixed costs are $52,000. Cost estimates are considered accurate within a range of ±1 percent. The depreciation expense is $18,400. The sale price is estimated at $54 a unit, ±2 percent. What is the total dollar difference between the revenue using the optimistic sale price versus the expected sale price?
When studying a project, the following variable costs were estimated for a normal production capacityof 140,000 units, with a maximum capacity of 200,000 units: Materials $120,000Labor $300,000Other $80,000Fixed costs are estimated, according to the level of production, in: Production Fixed Cost 0 – 40,000 $320,000 40,001 – 130,000 $380,000 130,001 – 180,000 $420,000 180,001 – 200,000 $500,000 If the selling price of each unit is $15 and the expected production is 100,000 units per year, what isthe minimum number of additional units that need to be sold at the price of $11 per unit to show aprofit of $762,000 per year? To raise sales to 120,000 units per year, how much could be spentadditionally in advertising (fixed cost) so that by maintaining a price of $15, a profit of20% on sales?
Currently, the unit selling price of a product is $750, the unit variable cost is $600, and the total fixed costs are $2,550,000. A proposal is being evaluated to increase the unit selling price to $800. a. Compute the current break-even sales (units). units b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased to the proposed $800, and all costs remain constant. units
Can you kindly help show the steps for calculating the Working Capital for a product line capable of producing 1.25 Million units per year, total estimated investment cost for the new line is $25 Million, selling price is fixed for the project life at $125 per unit. Working capital based on a 2.5-month supply of raw materials and 1.5 months of combined inventory (WIP and finished goods)? Variable costs per unit include $35 for materials, $20 for manufacturing, and $18 for labor. There are additional fixed operating and maintenance costs totaling $14.25 Million per year. Salvage value equal to 20% of the purchase price at the end of the 6-year project life. The Federal tax rate is 23% and State tax rate is 8.75%. MARR of 18%. Inflation is expected to increase the variable and fixed costs by 6.4% after the first year. In years 3- 6, inflation is expected to decline by 1.2% each year (year 2 inflation is 6.4%, year 3 is 5.2%, etc.) The project falls under a 7-year MACRS class life. The…
A proposed project has fixed costs of $7,400, depreciation expense of $1,320, and a sales quantity of 1,600 units. The total variable costs are $5,607. What is the contribution margin per unit if the projected level of sales is the accounting break-even point? Question 10 options: $6.28 $4.63 $5.45 $5.16 $8.13
Currently, the unit selling price of a product is $210, the unit variable cost is $170, and the total fixed costs are $312,000. A proposal is being evaluated to increase the unit selling price to $230. a. Compute the current break-even sales (units). b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant.
Chadron Motors is reviewing a project with sales of 6,200 units, ±2 percent, at a sales price of $29, ±1 percent, per unit. The expected variable cost per unit is $11, ±3 percent, and the expected fixed costs are $85,578, ±1 percent. The depreciation expense is $68,000 and the tax rate is 21 percent. What is the net income under the worst-case scenario? A. $4,696 B. –$28,704 C. $15,846 D. −$39,713 E. −$38,578