Question
The manufacturer of a product that has a variable cost of $2.50 per unit and a total fixed cost of $136,000 wants to determine the
The manufacturer of a product that has a variable cost of $2.50 per unit and a total fixed cost of $136,000 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?_____units (Round your answer to the nearest whole number).
What will be the manufacturers profit or loss on the sales of 89,000 units? $______ (Round your answer to the nearest dollar).
If fixed costs rise to $200,000, what is the new level of sales necessary to break-even? _____units (Round your answer to the nearest whole number).
If variable costs decline to $2.35 per unit, what is the new level of sales necessary to break-even?_____units (Round your answer to the nearest whole number).
If fixed costs were to increase to $200,000, while variable costs declined to $2.35 per unit, what is the new break-even level of sales? _____units (Round your answer to the nearest whole number).
If a major proportion of fixed costs were noncash (depreciation), would fail to achieve the break-even level of sales imply that the firm cannot pay its current obligations as they come due? Suppose $104,000 of the above-fixed costs of $136,000 were depreciation expense. What level of sales would be the cash break-even level of sales? Use the initial variable cost in your calculations _____units (Round your answer to the nearest whole number).
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