Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

French Meditrainia ormal annual selling volume (units) 100,000 200,000 300,000 nit selling price $2.00 $1.40 $0.80 ariable cost per unit $1.20 $0.80 $0.50 Total fixed

image text in transcribed
image text in transcribed
French Meditrainia ormal annual selling volume (units) 100,000 200,000 300,000 nit selling price $2.00 $1.40 $0.80 ariable cost per unit $1.20 $0.80 $0.50 Total fixed costs for the entire company are $282,000 per year. All three products are sold in highly competitive markets around the globe, so the company is unable to aise its prices without losing unacceptable numbers of customers. The company has no inventories of work-in process or finished goods due to an extremely efficient just-in-time system. REQUIRED What is the company's overall break-even in total sales dollars? Of the total fixed costs of $282,000, $18,000 could be avoided if the French Carpet was dropped, $96,000 if the Meditrainian Carpet was dropped and $60,000 if the Welsh Carpet was dropped. The remaining fixed costs are common and are unavoidable unless the company went out of business. a. What is the break-even quantity and dollars of each product? b. If the company sells exactly the break-even quantity of each product, what will be the overall profit of the company? Explain this result

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Financial Accounting Theory

Authors: William R Scott

5th Edition

0132072866, 978-0132072861

Students also viewed these Accounting questions

Question

understand possible effects of lifestyle risk factors;

Answered: 1 week ago