Question
I resent my question with corrections. My apologies earlier for it being incomplete. Please see if my answers are correct for Questions A and B
I resent my question with corrections. My apologies earlier for it being incomplete. Please see if my answers are correct for Questions A and B ? If not please assist me with how you came about your answer . Thank you in advance....
Expected unit sales: 10 ,000 UNITS Fixed costs $50,000 Selling Price per unit : $12.50 Per Unit Variable Cost: $4.50 Material cost : 15.90
Question A A) Calculate the break-even point in units and in dollars for A enterprises .
Formula to calculate break-even point is Selling Price ( Units - Variable Costs) = Total fixed Cost
Taking units as common Units ( Selling Price - Variable Costs) = Total Fixed Cost
Units = Total Fixed costs/ (Selling Price - Variable Cost)
Answer : In Units = $50000/$12.50 - $4.50) = $50000/$8 = 6250 units Break-even point in "units" is 6250 units
Formula to calculate Break-even point in dollars Units X Selling Price
Answer :
In Dollars = 6250 units X $12.50 = $78125 Break-even in dollars = $78,125
Question B B) What if the material cost was actually 20.50 due to the increase in transportation costs and the sales for the month of July were not collected in July but in August ?
Calculate the "new break" even in units and dollars
In Units = $50000/$20.50 - $4.50) = $50000/$15= 3,125 units Break-even point in "units" is 3,125 units
In Dollars = 3,125 units X $20.50 = $ 64062.50 Break-even in dollars = $64,062.50
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