Question

At the break-even point of 400 units, the variable costs were $400 and the fixed costs...

At the break-even point of 400 units, the variable costs were $400 and the fixed costs were $200. What will the 401st unit sold contribute to profit before income taxes?

Select one:

a. $ 0

b. $ 0.50

c. $ 1.50

d. $ 1.00

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Break even point = 400 units

Variable cost at breakeven point = $400

Fixed cost at breakeven point = $200

Total cost at breakeven point = Variable cost at breakeven point + Fixed cost at breakeven point

= 400 + 200

= $600

At the breakeven point, total cost is equal to sales.

Hence, sales revenue at 400 units = $600

Selling price per unit = Sales/Number of units

= 600/400

= $1.50

Variable cost per unit = Total variable cost/Number of units

= 400/400

= $1

Contribution margin per unit = Selling price per unit - Variable cost per unit

= 1.50 - 1

= $0.50

Hence, 401st unit will contribute to profit = $0.50

Correct option is (b)

kindly give a positive rating if you are satisfied with the solution. Please ask if you have any query related to the question, Thanks.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A company's break-even point will not be increased by: a) an increase in total fixed costs....
A company's break-even point will not be increased by: a) an increase in total fixed costs. b) a decrease in the selling price per unit. c) an increase in the variable cost per unit. d) an increase in the number of units produced and sold.
Break-Even Point Hilton Enterprises sells a product for $115 per unit. The variable cost is $76...
Break-Even Point Hilton Enterprises sells a product for $115 per unit. The variable cost is $76 per unit, while fixed costs are $357,435. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $123 per unit. a. Break-even point in sales units units b. Break-even point if the selling price were increased to $123 per unit units Target Profit Trailblazer Company sells a product for $245 per unit. The variable...
If fixed costs increased and variable costs per unit decreased, the break-even point would a. decrease...
If fixed costs increased and variable costs per unit decreased, the break-even point would a. decrease b. increase c. remain the same d. cannot be determined from the data provided
The Atlantic Company sells a product with a break-even point of 6,475 sales units. The variable...
The Atlantic Company sells a product with a break-even point of 6,475 sales units. The variable cost is $94 per unit, and fixed costs are $375,550. Determine the unit sales price. Round answer to nearest whole number. $ Determine the break-even points in sales units if the company desires a target profit of $96,454. Round answer to the nearest whole number. units
If the variable cost % is .60 , find the contribution margin % Fixed costs= 400...
If the variable cost % is .60 , find the contribution margin % Fixed costs= 400 , contribution margin %   is .40. Find sales dollars needed to break even. Fixed costs= 500 , contribution margin per unit =10. Find sales in units to earn a net income of 100. Selling price per unit= 80 ; variable costs per unit= 60; fixed costs= 200.    Find the contrib. margin %.
option 1: fixed costs of ¥ 10?000 and a break-even point of 500 units option 2:...
option 1: fixed costs of ¥ 10?000 and a break-even point of 500 units option 2: fixed costs of ¥ 20?000 and a break-even point of 700 units which option should you choose if you are expecting to produce 600 units A option one B option two C both options are equally desirable D the best option is indeterminable
Break-Even Point Nicolas Enterprises sells a product for $95 per unit. The variable cost is $43...
Break-Even Point Nicolas Enterprises sells a product for $95 per unit. The variable cost is $43 per unit, while fixed costs are $1,116,752. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $102 per unit. a. Break-even point in sales units units b. Break-even point if the selling price were increased to $102 per unit units
Break-Even Point Nicolas Inc. sells a product for $62 per unit. The variable cost is $38...
Break-Even Point Nicolas Inc. sells a product for $62 per unit. The variable cost is $38 per unit, while fixed costs are $69,120. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $68 per unit. a. Break-even point in sales units units b. Break-even point if the selling price were increased to $68 per unit units
Break-Even Point Hilton Enterprises sells a product for $104 per unit. The variable cost is $51...
Break-Even Point Hilton Enterprises sells a product for $104 per unit. The variable cost is $51 per unit, while fixed costs are $1,160,117. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $110 per unit. a. Break-even point in sales units units b. Break-even point if the selling price were increased to $110 per unit units
Total fixed cost = $66,000 Selling price per unit = $14 Variable costs per unit =...
Total fixed cost = $66,000 Selling price per unit = $14 Variable costs per unit = $6 Net target income (after tax) = $52,000 Tax rate = 35%. a)Calculate break even point in units b) calculate the sales revenue (in dollars) required to achieve the target income c) calculate the difference in operating income when one extra unit is sold d) if fixed cost increased by 20%, what is the new unit contribution margin required to maintain the same break-even...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT