Sunland Corp. had total variable costs of $193,800, total fixed
costs of $133,300, and total revenues of $340,000.
Compute the required sales in dollars to break even.
Required sales | $ |
Amanda Company reports the following total costs at two levels
of production.
Classify each cost as variable, fixed, or mixed.
5,000 Units |
10,000 Units |
|||||
Indirect labor | $ 3,000 | $ 6,000 |
Fixed CostsMixed CostsVariable Costs |
|||
Property taxes | 7,000 | 7,000 |
Fixed CostsMixed CostsVariable Costs |
|||
Direct labor | 28,000 | 56,000 |
Fixed CostsMixed CostsVariable Costs |
|||
Direct materials | 22,000 | 44,000 |
Fixed CostsMixed CostsVariable Costs |
|||
Depreciation | 4,000 | 4,000 |
Fixed CostsMixed CostsVariable Costs |
|||
Utilities | 5,000 | 8,000 |
Fixed CostsMixed CostsVariable Costs |
|||
Maintenance | 9,000 | 11,000 |
Fixed CostsMixed CostsVariable Costs |
1. contribution = revenues - variable costs
=>$340,000-193,800
=>$146,200.
contribution margin ratio = contribution / sales
=>$146,200/340,000
=>0.43.
sales in dollars to break even = fixed costs / contribution margin ratio
=>$133,300/0.43
=>$310,000.
second part;
indirect labor | variable cost |
property tax | fixed |
direct labor | variable |
direct material | variable |
depreciation | fixed |
utilities | mixed |
maintenance | mixed |
working
here units double from 5000 unit to 10,000
so a cost which doubles is variable cost
a cost which remains same is fixed cost
a cost which increases but does not double is a mixed cost.
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