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3 K L N Chapter 21 Required: Consider and answer each of the following questions independently Round calculations to the nearest unit (a) Determine the current break-even point in units and dollars. 1 ACC 122 In-Class Homework Problem 2 Trimble Company sells an electronic toy for $40. 3 The variable cost is $24 per unit and the fixed cost is $32,000 per year. 4 Management is considering the following changes 5 Alternative 81 8 Keep the current situation Alternative 2 Increase selling price 10 percent to counteract an . expected 25 percent increase in fixed cost . Alternative Reduce fixed cost by 25 percent by moving to a 10 lower rent location. This would have the effect of (b) Determine the break-even point in units and dollars assuming alternative 12. te) Determine the break even point required in units and dollars assuming alternative 13. 11 (d) Make an assessment of the best alternative 13 14 15 K17 4 v fx B c D E H 1 4 Current 6 Break Even Point in Units Fleed Costs / Contribution Margin per Unit 6 7 per Year Fbeed Costs Margin in Units Break Even Units 9 Units per Year 10 11 12 Break Even Point in Dollars Fbed Costs / Contribution Margin Ratio 13 14 per Year Fixed Costs Contribution Ratio Break Even Dollars 16 Yearly Sales Dollars 17 20 18 19 Alternative 2 Break Even Point in Units Fixed Costs / Contribution Margin per Unit 21 22 Fixed Costs per Year 23 Margin in Units 24 Break Even Units Units per Year 25 26 27 Break Even Point in Dollars = Fixed Costs / Contribution Margin Ratio 28 29 30 per Year Fixed Costs Contribution Ratio Break Even Dollars 31 Yearly Sales Dollars 32 33 34 Alternative 3 35 Break Even Point in Units - Fixed Costs / Contribution Margin per Unit 36 37 per Year 38 Fixed Costs Margin in Units Break Even Units 39 Units per Year 40 41 42 Break Even Point in Dollars Fixed Costs / Contribution Margin Ratio 42 Fixed Costs per Year 222 per Year 23 Fbed Costs Margin in Units Break Even Units 24 Units per Year 25 27 Break Even Point In Dollars - Fixed Costs / Contribution Margin Ratio 28 per Year 30 Fixed Costs Contribution Ratio Break Even Dollars 31 Yearly Sales Dollars 33 34 Alternative 3 35 Break Even Point in Units - Fixed Costs / Contribution Margin per Unit 36 Fbxed Costs per Year Margin in Units Break Even Units Units per Year 40 37 38 39 41 42 Break Even Point in Dollars - Fixed Costs / Contribution Margin Ratio 44 per Year 45 Fixed Costs Contribution Ratio Break Even Dollars 46 Yearly Sales Dollars 47 48 49 50 Assessment 51 52 Which alternative is the best business decision? 53 55 56 57 58 59 60