Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

For questions 1 0 - 1 2 , refer to the following problem: A manufacturing company is planning to make a newly developed product. Annual

For questions 10-12, refer to the following problem:
A manufacturing company is planning to make a newly developed product. Annual fixed cost for manufacturing of the product is $60,000. The selling price is $10? unit, and the variable cost is $6/unit.
10. To break even; the annual production level for the company needs to be at,
a.10,000 units
b.20,000 units
c.15,000 units
d.6,000 units
11. To make profit of $16,000; the annual production level for the company needs to be at,
a.19,000 units
b.19,500 units
c.20,000 units
d.31,000 units
12. If the company sets annual production at 12,000 units, what must the selling price be to beak even. Assume annual fixed cost is still $60,000 and unit varable cost is $6? unit.
a. $15/unit
b. $10/unit
c. $12/unit
d. $11? unit
For questions 13-16, refer to the following problem:
A company is considering two options for production of a part needed in manufacturing process. Cost information for these two options is as follows:
\table[[ALTERNATIVE,FIXED COST,VARIABLE COST],[Special-Purpose Equipment,$250,000 per year,$10 per unit],[General-Purpose Equipment,$50,000 per year,$20 per unit]]
Using the above information, answer the following questions:
13. What is the break even quantity between the two options?
a.20,000 units per year
b.40,000 units per year
c.25,000 units per year
d.50,000 units per year
What are the total costs under the Specil Pupuse Rqupunent opion for an annual quantily of 50,000 units?
a. $1,000,000
b.,$750.000
c.,$500.000
d. SR50,000
What are the total costs under the Constal Pupow Rumprient pption for an anual quantity of 50,000 mits?
Si00,000
b.,$450,000
c.,$800,000
d.,$1.050,000
For what range of ouput is the spetwi Pupustequpment the low cost option?
a. more thas 40,000 units per year
b. more than 20,000 units per year
c.0-20,000 unis per year
d.0=40,000 unis per year
image text in transcribed

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

Step: 3

blur-text-image

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 Theory

Authors: Ahmed Raihi-Belkaoui

5th Edition

1844800296, 978-1844800292

More Books

Students also viewed these Accounting questions

Question

What are theories regarding midterm elections?

Answered: 1 week ago