Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I'm not sure if I did the assignment correctly. Please see the spreadsheet photo that shows the calculations and has the assignment directions. B E

I'm not sure if I did the assignment correctly. Please see the spreadsheet photo that shows the calculations and has the assignment directions.

image text in transcribed
B E H KINDLE LANE TOYS Small Facility FIXED COST Week 6 Assignment Rent $ 2,600.00 kendall Lane s planning to make a unique toy that promises to keep Insurance $ 500.00 small children entertained for hours, kendall believes that parents Other Fixed Costs $ 1,500.00 everywhere will want to buy the toy, with a selling price of $25, Total Fixed Cost $ 4,700.00 kendall now needs to determine the costs and the required number of Large Facility toys needed to be sold before earning a profit, the break-even point. FIXED COST After researching the costs to produce the toy, the following two Rent $ 5,000.00 locations with associated costs have been determined Insurance $ 800.00 Other Fixed Costs 2,000.00 The rent for the small facility will be $2,600 per month, insurance Total Fixed Cost 7,800.00 $600 per month, and other fixed costs are estimated at $1,500 per month. This facility has a capacity to produce 200 toys per month at a variable cost for each toy of $5.00. Small Large Prices per Unit (P) 25.00 | $ 25.00 Variable Cost per unit (VC) | $ 5.00 $ 5.00 The rent for a larger facility will be $5,000 per month, insurance $800 Unit Contribution (UC) 20.00 $ 20.00 per month, and other fixed costs are estimated at $2,000 per month. Quanity (Q) $ 200.00 $ 450.00 This facility has a capacity to produce 450 toys per month at a variable Total Fixed Cost (FC) $ 4,700.00 $ 7,800.00 Profit (UC+Q) 4,000.00 $ 9,000.00 cost for each toy of $5.00. FC/(P - VC) is the Breakeven point in units 235 390 Summary -Part 2 Small Facility Break Even Point PO-VCQ-FC=0) (700.00) Large Facility Break Even Point PQ-VCQ-FC=0) 1,200.00 Sheet 1 + DY

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

Detecting Accounting Fraud Analysis And Ethics

Authors: Cecil W. Jackson

1st Edition

1292059400, 9781292059402

More Books

Students also viewed these Accounting questions