Question
Picnic Time produces a picnic basket that is sold for $ 1 0 0 per unit. Assume the company produced and sold 4 , 0
Picnic Time produces a picnic basket that is sold for $ per unit. Assume the company produced and sold baskets during July. There were no beginning or ending inventories. Variable and fixed costs follow.
Variable Cost per Unit Fixed Costs per Month
Manufacturing: Manufacturing overhead $
Direct materials. $ Selling and administrative
Direct labor Total $
Manufacturing overhead $
Selling and administrative
Total $
b Determine the breakeven point in sales dollars.
Note: Do not round intermediate calculations
Note: Round up to the nearest dollar, enter $ for $
$Answer
c Suppose the cost of labor is expected to increase next year. How will this affect the
breakeven point?
Breakeven point will Answer
d Determine July's margin of safety in sales dollars.
$Answer
e What dollar sales volume is currently required to obtain a beforetax profit of $
Note: Do not round intermediate calculations
Note: Round up to the nearest dollar, enter $ for $
$Answer
Step by Step Solution
There are 3 Steps involved in it
Step: 1
b To determine the breakeven point in sales dollars we need to calculate the total fixed costs and t...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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