Question

For the coming year, Cleves Company anticipates a unit selling price of $120, a unit variable...

For the coming year, Cleves Company anticipates a unit selling price of $120, a unit variable cost of $60, and fixed costsof $552,000.

Required:

1. Compute the anticipated break-even sales (units).
units

2. Compute the sales (units) required to realize a target profit of $270,000.
units

3. Construct a cost-volume-profit chart, assuming maximum sales of 18,400 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a loss, or break-even.

$1,548,000
$1,380,000
$1,104,000
$828,000
$660,000

4. Determine the probable income (loss) from operations if sales total 14,700 units. If required, use the minus sign to indicate a loss.
$

Homework Answers

Answer #1

1) Contribution Margin per unit = Selling price - Variable cost

= $120 - $60 = $60 per unit

Break Even Sales (units) = Fixed Cost/Contribution Margin per unit

= $552,000/$60 per unit = 9,200 units

2) Units required to be sold = (Fixed Cost+Target Profit)/Contribution Margin per unit

= ($552,000+$270,000)/$60 per unit

= $822,000/$60 per unit = 13,700 units

3) Break Even Sales in $ = Break even units*Selling price

= 9,200 units*$120 per unit = $1,104,000

The sales above $1,104,000 will generate profit and sales below $1,104,000 will result in loss.

Sales Profit/(Loss) or Break Even
$1,548,000 Profit
$1,380,000 Profit
$1,104,000 Break Even
$828,000 (Loss)
$660,000 (Loss)

4) Net Income = Total Contribution Margin - Fixed Cost

= (14,700 units*$60 per unit) - $552,000

= $882,000 - $552,000 = $330,000

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The DeWayne Company sells binoculars for $140 per unit. The variable cost is $100 per unit...
The DeWayne Company sells binoculars for $140 per unit. The variable cost is $100 per unit while the      fixed costs are $1,200,000.       Compute: The anticipated break-even sales (units) for binoculars. The sales (units) for binoculars required to realize the target operating income of $400,000. Determine the probable operating income (loss) if sales total of 32,000 units. If the selling price goes up to $150 per unit while all costs remain the same, what is the new break-even...
For the coming year, Vermont Products anticipates a unit selling price of $50, a unit variable...
For the coming year, Vermont Products anticipates a unit selling price of $50, a unit variable cost of $20, and fixed costs of $135,000. How many units must be sold to realize income from operations of $65,000?
Break-Even Sales Currently, the unit selling price of a product is $320, the unit variable cost...
Break-Even Sales Currently, the unit selling price of a product is $320, the unit variable cost is $260, and the total fixed costs are $918,000. A proposal is being evaluated to increase the unit selling price to $350. a. Compute the current break-even sales (units). units b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant. units
Break-Even Sales Currently, the unit selling price of a product is $320, the unit variable cost...
Break-Even Sales Currently, the unit selling price of a product is $320, the unit variable cost is $260, and the total fixed costs are $810,000. A proposal is being evaluated to increase the unit selling price to $350. a. Compute the current break-even sales (units). units b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant. units
Break-Even Sales Currently, the unit selling price of a product is $230, the unit variable cost...
Break-Even Sales Currently, the unit selling price of a product is $230, the unit variable cost is $190, and the total fixed costs are $448,000. A proposal is being evaluated to increase the unit selling price to $260. a. Compute the current break-even sales (units). units b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased to the proposed $260, and all costs remain constant. units
Break-Even Sales Currently, the unit selling price of a product is $230, the unit variable cost...
Break-Even Sales Currently, the unit selling price of a product is $230, the unit variable cost is $190, and the total fixed costs are $420,000. A proposal is being evaluated to increase the unit selling price to $260. a. Compute the current break-even sales (units). units b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased to the proposed $260, and all costs remain constant. units
During the upcoming year De Anza Co. expects the following data: Expected unit selling price is:...
During the upcoming year De Anza Co. expects the following data: Expected unit selling price is: $125 Expected unit variable cost is: $70 Expected total fixed costs are: $1,512,500 1. Calculate breakeven point in both units and dollars. (Show work in blank space below.) Round units to the nearest unit and round dollars to the nearest dollar. 2. Compute sales units required to realize income from operations of $630,000. 3. Construct a cost-volume-profit chart assuming maximum sales in the relevant...
Break-even sales and sales to realize operating income For the current year ended March 31, Cosgrove...
Break-even sales and sales to realize operating income For the current year ended March 31, Cosgrove Company expects fixed costs of $540,000, a unit variable cost of $51, and a unit selling price of $76. a. Compute the anticipated break-even sales (units). units b. Compute the sales (units) required to realize operating income of $125,000. units
Break-even sales and sales to realize operating income For the current year ended March 31, Cosgrove...
Break-even sales and sales to realize operating income For the current year ended March 31, Cosgrove Company expects fixed costs of $453,600, a unit variable cost of $56, and a unit selling price of $83. a. Compute the anticipated break-even sales (units). units b. Compute the sales (units) required to realize operating income of $105,300. units?
Break-even sales and sales to realize operating income For the current year ended March 31, Cosgrove...
Break-even sales and sales to realize operating income For the current year ended March 31, Cosgrove Company expects fixed costs of $446,200, a unit variable cost of $47, and a unit selling price of $70. a. Compute the anticipated break-even sales (units) ? units b. Compute the sales (units) required to realize operating income of $103,500 ? units
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT
Active Questions
  • A sample is obtained from a population with u=40 and o=6. Which of the following sample...
    asked 17 minutes ago
  • In a survey, 11 people were asked how much they spent on their child's last birthday...
    asked 35 minutes ago
  • Discussion 7.1: Practice Critical Thinking How well do you understand this material? Reading the material is...
    asked 36 minutes ago
  • A credit score measures a​ person's creditworthiness. Assume the average credit score for Americans is 709....
    asked 39 minutes ago
  • A Database Administrator (DBA) is play both managerial role and technical role in a modern organization;...
    asked 54 minutes ago
  • The Federal Election Commission collects information about campaign contributions and disbursements for candidates and political committees...
    asked 54 minutes ago
  • In the week before and the week after a​ holiday, there were 10,000 total​ deaths, and...
    asked 57 minutes ago
  • 1. Identify the vertex of the quadratic equation y=2x2+8x-10. using the formula 2. Write the equation...
    asked 1 hour ago
  • How well do you understand this material? Reading the material is separate than understanding it; further,...
    asked 1 hour ago
  • Analyze the behavior of capacitors under steady state direct current and high frequency AC current (500...
    asked 1 hour ago
  • Traffic on the eastbound approach of a signalized intersection is traveling at 48 km/h, with a...
    asked 1 hour ago
  • Students in a chemistry class convince their teacher to use the following "group grading" scenario. Students...
    asked 1 hour ago