1. Oingo Inc. sells its product for $60.00. Its variable cost per unit is $48.00. Fixed costs total $30,000. How many units does the company need to sell to breakeven? What are the total sales in dollars at the breakeven point? How many units does the company need to sell to earn a profit of $120,000?

2. Pimpton Plows sells its product for $50. Its variable cost per unit is $19.00. Fixed costs total $434,000. How many units does the company need to sell to breakeven? What are the total sales in dollars at the breakeven point? How many units does the company need to sell to earn a profit of $155,000?

3. Big City Orchestra, Inc. produces a five-concert series every year. Its concert hall has 3,300 seats, all of which sell for $40 per ticket per concert. Variable costs are estimated to be $2 per ticket, related to printing, promotions, and mailings. Fixed costs, including salaries and operating expenses, total $427,500 per year. The orchestra averages 70% attendance per concert. What is the breakeven point in dollars of ticket sales? What is the breakeven point in tickets per concert? What is the expected total sales in dollars and units (tickets)? What is the projected net income at its expected sales level? What is the orchestras safety margin in sales dollars and tickets? How many tickets would need to be sold this year in order to earn enough profits to enable the orchestra to purchase a new pipe organ that costs $96,900? What would average attendance need to be to achieve this?

4. Husky and Starch Books provided the following information: Average selling price per book $25 Average variable cost per book $13 Monthly fixed costs $6,000 Compute the following: What is Husky and Starchs contribution margin per unit in dollars? What is Husky and Starchs contribution margin ratio? How many books must Husky and Starch sell to breakeven? How many books must Husky and Starch sell to earn $9,000 per month?

5. Last year, Leekys Pizza Ovens sold its ovens at a price of $800 each. The variable expenses for each oven were $500 and the annual fixed expenses totaled $270,000. Leekys Pizza Ovens had targeted a profit of $300,000 for the year but fell substantially short of that goal because product demand shifted resulting in sales of only 1,600 ovens. Leekys president assigned a management committee to analyze the situation and develop alternative courses of action for the coming year. The following three alternatives were presented to the president, but only one can be selected: Alternative A: Reduce the selling price by $70. The marketing department forecasts that with the lower price, 2,400 ovens could be sold during the year. Alternative B: Lower variable expenses per unit by $25 through the use of less expensive materials. Because of the difference in materials, the selling price would have to be lowered by $50 and sales of 2,100 ovens for the year are forecast. Alternative C: Cut fixed expenses by $50,000 and lower the selling price by 5 percent. Sales of 2,000 ovens would be expected for the year. If no changes are made to the selling price and cost behavior is unchanged, estimate the number of ovens that must be sold during the year to break even. If no changes are made to the selling price and cost behavior is unchanged, estimate the number of ovens that must be sold during the year to attain the target profit of $300,000. Determine which of the alternatives Leekys Pizza Ovens president should select to maximize profit.

6. Davids DVD Repair Company wants to open a repair shop in a suburb of a major metropolitan area. The industry association estimates that 30% of DVD players are repaired by similar service companies and that the average owner spends $80 per DVD player on repairs each year. The available commerce data indicates that there are 50,000 DVD players in the metropolitan service area. Three other competitors exist within a 25 mile radius of the proposed business location. Based on a consumer survey, the owner believes that he can capture 20% of the market in the first year of operation. Based on this data, address the following requirements: What is the potential number of DVD players likely to be commercially repaired during one year? How much revenue can Davids DVD Repair Company expect to generate in its first year of operations?

7. The Party Place Company wants to open a dining hall for group meetings and banquets. A survey of businesses and organizations within a 30 mile radius indicates that the Party Place can expect to provide meeting facilities to 0.75 groups per day for 360 days of the year. On average during the year, 50% of all groups would be expected to want basic food service and 30% are expected to want premium food service. Groups pay a facility rental fee of $80 per meeting. If the group requests basic food service, the facilities fee is reduced by one-half. No facilities fee is charged for groups that request premium food service. Basic food service is provided at a cost of $10 per plate and premium food service is provided at $25 per plate. Groups that request basic food service are expected to average 50 people per group. Groups that request premium food service are expected to average 30 people per group. Based on this data, address the following requirements: What is the number of groups that are expected to want premium food service, basic food service, and no food service during one year? How much revenue can the Party Place expect to generate during its first year of operations?

8. Mr. Fixits wants to open a lawn mower repair shop in a suburb of a major metropolitan area. The industry association estimates that 40% of mowers are repaired by similar service companies and that the average owner spends $150 per mower on maintenance each year. The census and local chamber of commerce data indicate that there are 35,000 mowers in the county. Seven other competitors exist within a 25 mile radius of the proposed business location. Based on a consumer survey, Mr. Fixits owners believe that they can capture 8% of the market in the first year of operation. Based on this data, address the following requirements: What is the potential number of lawn mowers likely to be repaired in one year? What is the total potential mower repair revenue available in the market in one year? How much revenue can Mr. Fixit expect to generate during its first year of operation?

9. The Beejue Theatre has 12 screens on which first-run movies are presented 365 days out of the year. Each movie is shown an average of 5 times per day. The number of seats for each screen varies, with an average of 400 seats per screen. Ticket prices average $9 per seat. The overall average occupancy rate per movie is 15%. Compute the total possible tickets that could be sold assuming 100% occupancy. Compute the estimated total customer demand (number of movie seats sold) for each year. Compute the estimated total revenues for one fiscal year. If management wanted to generate $18,000,000 in annual revenues, what would the average occupancy percentage rate need to be?

10. Acme Brick Company estimated its annual total cost function to be: Y = $320,000 + 2.56x

Assuming that Y represents total cost and x equals the number of units sold, use this equation to answer the following questions: What is the firms total fixed cost? What is the firms variable cost per unit? Compute total costs if the firm sells 10,000 units. Compute total costs if the firm sells 30,000 units.