Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

Assume that sales are predicted to be $7,500, the expected contribution margin is $3,000, and a net loss of $500 is anticipated. The break-even point

image text in transcribed
image text in transcribed
image text in transcribed
Assume that sales are predicted to be $7,500, the expected contribution margin is $3,000, and a net loss of $500 is anticipated. The break-even point in sales ($) is: Select one: a. 5,833 b. 8,000 c. 8,750 d. 6,250 e. 4,167 At the breakeven point Select one: a. Fixed costs will be equal to variable costs b. Sales will be equal to variable costs plus target profit c. Fixed costs will be equal contribution margin minus variable costs d. Sales will be equal to variable costs minus fixed costs e. Sales will be equal to fixed costs plus zero target profit plus variable costs XYZ Company incurred the following costs for the month of August when it observed an activity level of 5,000 units: Variable costs $32,500; Fixed costs $25,000; Mixed costs $21,500; Total costs $79,000. During October, the activity level was 16,000 units, and the total costs incurred were $178,000. If the activity level were expected to be 8,000 units for the month of December, what amount of total costs would be expected? Select one: a. $115,000 b. $124,000 c. $133,000 d. None of the answers given e. $106,000 The break-even point is that level of activity where: Select one: a. variable cost equals fixed cost. b. sales revenue equals fixed cost. c. total contribution margin equals the sum of variable cost plus fixed cost. d. contribution margin equals fixed cost. e. sales revenue equals total variable cost

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image
Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting An Introduction

Authors: Atrill Peter, Eddie McLaney

6th Edition

0273771833, 978-0273771838

More Books

Students explore these related Accounting questions