Question

**Problem 1**

The fixed cost of a company is $30,000 p.a. prime cost is $6 per unit.Variable Overheads are $4 per unit.Selling price is $20 per unit. Present sales are 20,000 units a year.Calculate the break-even point in sales and units.

**Problem 2**

Calculate the break-even point from the following particulars:

Budgeted output80,000 units

Fixed Expenses$45,000.

Variable Cot Unit$15.00

Selling Cost per unit$25.00

If the selling price is reduce to $20 per unit, what will be the new break-even point?

**Problem 3**

A factory manufacturing sewing machines has the capacity to produce 500 machines per annum. The marginal (variable) cost of each machine is $200, and each machine is sold for $250. Fixed costs are $12,000 per annum. Calculate the break even points for output and sales and show what profit will result if out output is 90% of Capacity.

Answer #1

**Answer to Problem
1:**

Break Even Point (in Units) = Fixed Cost / Contribution Margin
per unit

Contribution Margin per unit = Selling Price per unit – Variable
Expense per unit

Variable Expense per unit = $6.00 + $4.00 = $10.00

Contribution Margin per unit = $20.00 - $10.00

Contribution Margin per unit = $10.00

Break Even Point (in Units) = 30,000 / 10

**Break Even Point (in Units) = 3,000 units**

Break Even Point (in Dollar Sales) = Fixed cost / Contribution
Margin ratio

Contribution Margin ratio = Contribution Margin / Sales * 100

Contribution Margin ratio = 10/ 20 * 100

Contribution Margin ratio = 50%

Break Even Point (in Dollar Sales) = 30,000 / 0.50

**Break Even Point (in Dollar Sales) = $60,000**

1) Selling price per unit Is $60, variable cost per unit is $30
and fixed cost per unit is $20. When this company operates above
the break-even point, the sale of one more unit will increase net
incomes by $10
a) True
b) False
2) A company with sales of $100,000, the variable cost of
$70,000 and fixed cost of $50,000 will reach its break-even point
if sales are increased by $20,000
a) True
b) False

1) Bears Company sells a product for $15 per unit. The
variable cost is $10 per unit and fixed costs are $1,750,000.
Determine:
The Break-Even point in sales units
The Break-Even point if selling price were increased to
$655 per unit
2) Bear Company sells a product for $15 per unit. The
Variable cost is $10 per unit and fixed costs are $1,750,000.
Determine:
The Break-Even Point in sales units
The Sales units required for the company to achieve a...

Hilton Enterprises sells a product for $104 per unit. The
variable cost is $69 per unit, while fixed costs are $257,250.
Determine (a) the break-even point in sales units and (b) the
break-even point if the selling price were increased to $111 per
unit.
a. Break-even point in sales units
units
b. Break-even point if the selling price were
increased to $111 per unit
units

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...

Steven Company has fixed costs of $289,518. The unit selling
price, variable cost per unit, and contribution margin per unit for
the company's two products are provided below.
Product
Selling Price per Unit
Variable Cost per Unit
Contribution Margin per Unit
X
$848
$318
$530
Y
645
345
300
The sales mix for Products X and Y is 60% and 40%, respectively.
Determine the break-even point in units of X and Y. Round
answers to the nearest whole number.
units...

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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 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 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 = $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...

Heyden Company has fixed costs of $705,600. The unit selling
price, variable cost per unit, and contribution margin per unit for
the company's two products follow:
Product
Selling Price
Variable Cost per Unit
Contribution Margin per Unit
QQ
$700
$460
$240
ZZ
380
260
120
The sales mix for Products QQ and ZZ is 20% and 80%,
respectively. Determine the break-even point in units of QQ and ZZ.
If required, round your answers to the nearest whole number.
a. Product...

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