Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The manufacturer of a product that has a variable cost of $2.80 per unit and total fixed cost of $132,000 wants to determine the level
The manufacturer of a product that has a variable cost of $2.80 per unit and total fixed cost of $132,000 wants to determine the level of output necessary to avoid losses.
- What level of sales is necessary to break-even if the product is sold for $4.90? Round your answer to the nearest whole number.
units
What will be the manufacturers profit or loss on the sales of 98,000 units? Round your answer to the nearest dollar.$
- If fixed costs rise to $189,000, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number.
units
- If variable costs decline to $2.65 per unit, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number.
units
- If fixed costs were to increase to $189,000, while variable costs declined to $2.65 per unit, what is the new break-even level of sales? Round your answer to the nearest whole number.
units
- If a major proportion of fixed costs were noncash (depreciation), would failure to achieve the break-even level of sales imply that the firm cannot pay its current obligations as they come due? Suppose $94,000 of the above fixed costs of $132,000 were depreciation expense. What level of sales would be the cash break-even level of sales? Use the initial variable cost in your calculations. Round your answer to the nearest whole number.
units
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