V. For example, suppose that the relevant range of production activity for a General Electric lightbulb plant is between 40,000 and 85,000 cases of lightbulbs per month and that total monthly fixed costs within the relevant range are $100,000. Within the relevant range, fixed costs will remain the same. If production falls below 40,000 cases, changes in production processes would slash fixed costs to $60,000 per month. If operations rise above 85,000 cases, rentals of additional facilities would boost fixed costs to $115,000 per month. Exhibit 2-6 graphs the actual costs in the top figure and the assumed fixed-cost-behavior in the bottom. The two are identical only within the relevant range. AZ Cose Volume-Profit and Vending Machines www.mart Fod Sovies Company operate it was die nach Jom tar Mion, and one four southwester the machined from the man face Indicion Vendman must rent the space coupled by a machines. The following po and revelationship pertanto compara program of Ho machines Pred only expenfotow Meie machine 50.10 51.768 Spec: O locations $30,00 500 Pharm www wvice the womachi Other feet Totally fixed cost SH.000 1600 Other data follow Per $100 of Sales 1004 Selling price Costock Contri male Per Unit (Snacko 31.00 . $3 These questions relate to the given data unless otherwise noted. Consider nach question independently 1. Wat is the monthly break-even point in mumber of units (snacks) in dollar sales? 2 1 45.000 units were sold, what would be the company's netice J. If the space rotal cost was doubled, what would be the monthly break-even polot in number of unit? In dollar les 4. Refer to the original data. If, in addition to the fixed space rent, Vendimart Food Services Company paid the vending machine manufacturer 5.07 per mit sold, what would be the monthly break even point number of units? Ia dollar sales? 5. Refer to the original data. If in addition to the fixed rent, Vendar paid the machine manut urer 511 for each unit sold in excess of the break-even point, what would the new net income be ir 45.000 units were sold atice Hall Business Publishing, Introduction to Management Accounting 14/e, Horngren/Sundem/Stratton/Schatzberg/Burgstal V. For example, suppose that the relevant range of production activity for a General Electric lightbulb plant is between 40,000 and 85,000 cases of lightbulbs per month and that total monthly fixed costs within the relevant range are $100,000. Within the relevant range, fixed costs will remain the same. If production falls below 40,000 cases, changes in production processes would slash fixed costs to $60,000 per month. If operations rise above 85,000 cases, rentals of additional facilities would boost fixed costs to $115,000 per month. Exhibit 2-6 graphs the actual costs in the top figure and the assumed fixed-cost-behavior in the bottom. The two are identical only within the relevant range. AZ Cose Volume-Profit and Vending Machines www.mart Fod Sovies Company operate it was die nach Jom tar Mion, and one four southwester the machined from the man face Indicion Vendman must rent the space coupled by a machines. The following po and revelationship pertanto compara program of Ho machines Pred only expenfotow Meie machine 50.10 51.768 Spec: O locations $30,00 500 Pharm www wvice the womachi Other feet Totally fixed cost SH.000 1600 Other data follow Per $100 of Sales 1004 Selling price Costock Contri male Per Unit (Snacko 31.00 . $3 These questions relate to the given data unless otherwise noted. Consider nach question independently 1. Wat is the monthly break-even point in mumber of units (snacks) in dollar sales? 2 1 45.000 units were sold, what would be the company's netice J. If the space rotal cost was doubled, what would be the monthly break-even polot in number of unit? In dollar les 4. Refer to the original data. If, in addition to the fixed space rent, Vendimart Food Services Company paid the vending machine manufacturer 5.07 per mit sold, what would be the monthly break even point number of units? Ia dollar sales? 5. Refer to the original data. If in addition to the fixed rent, Vendar paid the machine manut urer 511 for each unit sold in excess of the break-even point, what would the new net income be ir 45.000 units were sold atice Hall Business Publishing, Introduction to Management Accounting 14/e, Horngren/Sundem/Stratton/Schatzberg/Burgstal
