Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Grosheim Incorporated has fixed expenses of $213,000 per year. Right now, Grosheim Incorporated is selling its products for $150 per unit. Management is contemplating a
Grosheim Incorporated has fixed expenses of $213,000 per year. Right now, Grosheim Incorporated is selling its products for $150 per unit. Management is contemplating a 30% increase in the selling price for the next year. Variable costs are currently 30% of sales revenue and are not expected to change in dollar amount on a per unit basis next year (the company will pay the same amount for variable costs next year). If fixed costs increase 20% next year, and the new selling price per unit goes into effect, how many units will need to be sold to breakeven? O A. 1,704 units OB. 1,065 units O c. 1,420 units OD. 255,600 units Bottles R Us Bottling Company provides the following information about its single product. Targeted operating income Selling price per unit Variable cost per unit Total fixed cost $656,900 $7.65 $4.70 $174,345 How many units must be sold to earn the targeted operating income? (Round the final answer up to the nearest unit.) O A. 59,100 O B. 222,678 OC. 281,778 OD. 67,307 Click to select your answer. Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $490,000 359,000 131,000 76,000 $55,000 $360,000 235,000 125,000 38,000 $87,000 Sporty $130,000 124,000 6,000 38,000 $(32,000) Assuming fixed costs remain unchanged, how would discontinuing the Sporty line affect operating income? O A. Increase in total operating income of $130,000 OB. Decrease in total operating income of $131,000 O c. Decrease in total operating income of $6,000 OD. Increase in total operating income of $49,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started