Ques 1,2 and 3

Total operating profit (loss) 2. The Harmon Corporation manufactures bats with Larry Walker's autograph stamped on them. Each bat sells for $25 and has a variable cost of $14. There is $40,000 fixed costs involved in the production process. a. Compute the break-even point in units. b. Find the sales (in units) needed to earn a profit of $30,000. 3. Ensco Lighting Company has fixed costs of $100,000, sells its units for $28. and has variable costs of $15.50 per unit. a. Compute the break-even point. b. Ms. Watts comes up with a new plan to cut fixed costs to $75,000. However, more labour will now be Page 162 required, which will increase variable costs per unit to $17. The sales price will remain at $28. What is the new break-even point? c. Under the new plan, what is likely to happen to profitability at very high volume levels (compared to the old plan)? 4. Air Filter Ltd. sells its products for $6 per unit. It has the following costs. Rent $100,000 Factory labour S1.20 per unit Executive salaries 89,000 Raw materials 0.60 per unit Separate the expenses between fixed and variable costs per unit. Using this information and the sales price per unit of $6, compute the break-even point. 5. Shawn Penn and Pencils has fixed costs of $80,000. Its product currently sells for $5 per unit and has variable costs per unit of $2.50. Mr. Bic, the head of manufacturing, proposes to buy new equipment that will cost $400,000 and increase fixed 1. SUS Appliance toasters sell for $20 per unit, and the variable cost to produce them is $15. SUS estimates that the fixed costs are $80,000 a. Compute the break-even point in units. b. Fill in the table below in dollars) to illustrate that the break-even point has been achieved. Sales - variable costs Contribution margin - fixed costs Total operating profit (loss) 2. The Harmon Corporation manufactures bats with Larry Walker's autograph stamped on them. Each bat sells for $25 and has a variable cost of $14. There is $40,000 in fixed costs involved in the production process. a. Compute the break-even point in units. b. Find the sales (in units) needed to earn a profit of $30,000. 3. Ensco Lighting Company has fixed costs of $100,000, sells its units for $28, and has variable costs of $15.50 per unit