1.
Concept introduction:
Break-even point: Break-even point is the level of production at which the cost of production equals to the revenue for a product. It is the point at which the total cost and total revenue are equal, that means there is no gain or loss for the business. It is calculated by dividing the fixed cost of production by the contribution per unit of production.
The break-even point in unit sales assuming N does not hire the outside supplier.
2.
a.
Concept introduction:
Break-even point: Break-even point is the level of production at which the cost of production equals to the revenue for a product. It is the point at which the total cost and total revenue are equal, that means there is no gain or loss for the business. It is calculated by dividing the fixed cost of production by the contribution per unit of production.
The amount of profit with N earn assuming it produces and sells 18,000 units.
2.
b.
Concept introduction:
Break-even point: Break-even point is the level of production at which the cost of production equals to the revenue for a product. It is the point at which the total cost and total revenue are equal, that means there is no gain or loss for the business. It is calculated by dividing the fixed cost of production by the contribution per unit of production.
The amount of profit with N.
3.
Concept introduction:
Break-even point: Break-even point is the level of production at which the cost of production equals to the revenue for a product. It is the point at which the total cost and total revenue are equal, that means there is no gain or loss for the business. It is calculated by dividing the fixed cost of production by the contribution per unit of production.
To calculate: The break-even point in unit sales.
4.
a.
Concept introduction:
Break-even point: Break-even point is the level of production at which the cost of production equals to the revenue for a product. It is the point at which the total cost and total revenue are equal, that means there is no gain or loss for the business. It is calculated by dividing the fixed cost of production by the contribution per unit of production.
The total unit sales would N need to achieve in order to equal the profit earned in requirement 2a.
4.
b.
Concept introduction:
Break-even point: Break-even point is the level of production at which the cost of production equals to the revenue for a product. It is the point at which the total cost and total revenue are equal, that means there is no gain or loss for the business. It is calculated by dividing the fixed cost of production by the contribution per unit of production.
The total unit sales would N need to achieve in order to attain a target profit of $16,500 per month.
4.
c.
Concept introduction:
Break-even point: Break-even point is the level of production at which the cost of production equals to the revenue for a product. It is the point at which the total cost and total revenue are equal, that means there is no gain or loss for the business. It is calculated by dividing the fixed cost of production by the contribution per unit of production.
The amount of profit will N earn if it sells 35,000 units per month.
4.
d.
Concept introduction:
Break-even point: Break-even point is the level of production at which the cost of production equals to the revenue for a product. It is the point at which the total cost and total revenue are equal, that means there is no gain or loss for the business. It is calculated by dividing the fixed cost of production by the contribution per unit of production.
The amount of net profit.
5.
Concept introduction:
Break-even point: Break-even point is the level of production at which the cost of production equals to the revenue for a product. It is the point at which the total cost and total revenue are equal, that means there is no gain or loss for the business. It is calculated by dividing the fixed cost of production by the contribution per unit of production.
The amount of net profit.
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Chapter 5 Solutions
MANAGERIAL ACCOUNTING (ACCESS) >C<
- Chapter 6 RUN LIKE THE WIND PROFIT GOAL Please solve and explain the following problem "Run Like The Wind sells ceiling fans. Target profit for the year is $470,000. If each fans contribution margin is $32 and fixed costs total $222,640, what is the number of fans that must be sold to meet the company's goal?"arrow_forwardChanges in Fixed and Variable Costs; Break-Even and Target Profit Analysis Neptune Company produces toys and other items for use in beach and resort areas. A small, inflatable toy has come onto the market that the company is anxious to produce and sell. The new toy will sell for $3 per unit. Enough capacity exists in the company’s plant to produce 16,000 units of the toy each month. Variable expenses to manufacture and sell one unit would be $1.25, and fixed expenses associated with the toy would total $35,000 per month. The company’s Marketing Department predicts that demand for the new toy will exceed the 16,000 units that the company is able to produce. Additional manufacturing space can be rented from another company at a fixed expense of $1,000 per month. Variable expenses in the rented facility would total $1.40 per unit, due to somewhat less efficient operations than in the main plant. Required: 1. What is the monthly break-even point for the new toy in unit sales and dollar…arrow_forwardPROBLEM 8. The Color Company manufactures and sells two products. The selling prices and variable costs of the products are as follows: Blujets Blupens P20 Selling prices Variable costs P40 8 24 The sales for 2021 were in the ratio of 3 Blujets to 1 Blupen. Sales volume for 2021 was P1 million. Fixed costs for 2020 amounted to P390,000. Requirements: 4. If the sales mix was to change to 2 units of blujets to 1 unit of Blupen, would this have any effect on the breakeven sales? If so, what would be the new breakeven sales? 5. Assuming that the sales volume would remain at P1 million, what net income would be generated using the sales mix in number (4) above? 6. What sales revenue would be required if the firm wishes to generate a net income of P328,900 if the original mix of 3:1 prevailed?arrow_forward
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