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The manufacturer of a product that has a variable cost of $2.00 per unit and total fixed cost of $114,000 wants to determine the level
The manufacturer of a product that has a variable cost of $2.00 per unit and total fixed cost of $114,000 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 $4.20? Round your answer to the nearest whole number.
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What will be the manufacturers profit or loss on the sales of 92,000 units? Round your answer to the nearest dollar.$
- If fixed costs rise to $167,000, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number.
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- If variable costs decline to $1.90 per unit, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number.
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- If fixed costs were to increase to $167,000, while variable costs declined to $1.90 per unit, what is the new break-even level of sales? Round your answer to the nearest whole number.
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- 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 $102,000 of the above fixed costs of $114,000 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.
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