Question

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 range of 40,000 units. ( Use the available graph template below.) Label the following parts of the graph: Sales Revenue, Fixed Costs, Variable Costs, Total Costs, Profit Area, Loss Area, and Break Even Point.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Ans:

1.       Contribution margin per unit=$125-$70=$55,contribution margin ratio= 55/125=44%

Breakeven point in units=Total fixed cost/contribution margin per unit=$1512500/55=27500 units

Breakeven point in dollars= Total fixed cost/contribution margin ratio=$1512500/44%=$3437500

2.       Income from operation= $630000

Add: Fixed costs= $1512500

Contribution= $2142500

Expected sales in units= contribution / contribution margin per unit

                                            = $2142500/55=38955 units

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
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....
Grange manufacturing company had net income of $300,000 in 2017 when the selling price per unit...
Grange manufacturing company had net income of $300,000 in 2017 when the selling price per unit was $200 and data for variable and fixed costs were as follows:   Cost Schedule: Variable Costs: Direct Material $28 Direct Labour $35 Variable Manufacturing Overhead $17 Total $80 Fixed Costs: Manufacturing Overhead $225,000 Advertising 45,000 Administrative 150,000 Total $420,000 Required: Using the sales units calculated in (i), Construct a breakeven chart for Grange Manufacturing company, clearly showing the breakeven point and the margin of...
35. A. Flying Cloud Co. has the following operating data for its manufacturing operations: Unit selling...
35. A. Flying Cloud Co. has the following operating data for its manufacturing operations: Unit selling price $235 Unit variable cost $117 Total fixed costs $754,000 The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%. Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%. If sales prices are held constant, the next break-even point for Flying Cloud Co. will...
Hawke Caribbean Sales has developed the following projections for the upcoming year of operations. Sales of...
Hawke Caribbean Sales has developed the following projections for the upcoming year of operations. Sales of 100,000 units at $5 Units sold equal units produced Variable costs for 100,000 units: Direct material $125,000 Direct labor 100,000 Variable overhead     30,000 Selling and administrative expense     45,000 Total fixed costs 120,000 What is Hawke’s projected breakeven point in dollars? a. $500,000 b. $120,000 c. $130,000 d. $300,000
In CVP analysis, the unit contribution margin is: Sales price per unit less cost of goods...
In CVP analysis, the unit contribution margin is: Sales price per unit less cost of goods sold per unit Sales price per unit less FC per unit Sales price per unit less total VC per unit Same as the CM Maroon Company’s CM ratio of 24%.  Total FC are $84,000.  What is Maroon’s B/E point in sales dollars? $20,160 $110,536 $240,000 $350,000       If a firm’s forecasted sales are $250,000 and its B/E sales are $190,000, the margin of safety in dollars is:...
21. An assumption of the cost-volume-profit analysis is: to. The unit selling price remains constant throughout...
21. An assumption of the cost-volume-profit analysis is: to. The unit selling price remains constant throughout the relevant range. b. The total fixed cost remains constant throughout the relevance interval. c. No inventory or no change in inventory quantity. d. All of the above 22. If the unit sale price is $ 50, the unit variable cost is $ 20, the total fixed cost is $ 300,000, and the tax rate is 25%, the breakeven point is: to. 6,000 units...
Risk assessment calculations Baseline information: 40,000 units sold at a unit selling price of $100, variable...
Risk assessment calculations Baseline information: 40,000 units sold at a unit selling price of $100, variable costs of $80 per unit, fixed costs of $750,000 1. Calculate the contribution margin per unit in dollars and as a percentage 2. Prepare a financial report in the contribution margin format Calculate the breakeven point in dollars and unit sales 4. Prove the validity of the breakeven calculation by preparing a financial report using the contribution margin format 5. Calculate the performance level...
Given the following information: Selling Price (per unit): $10,000 Variable Costs (per unit): $7,000 Fixed Costs:...
Given the following information: Selling Price (per unit): $10,000 Variable Costs (per unit): $7,000 Fixed Costs: $200,000 Required Each of these are separate situations: What is the break-even point in total sales in dollars? How many units need to be sold to make a profit of $20,000? How many units need to be sold to make a profit of $20,000 if fixed costs increase from $200,000 to $250,000? How many units would they need to sell if they wanted to...
Fixed costs $200,000 20,000 units/year produced Selling price $30 Variable cost/unit $10 1. Should I invest...
Fixed costs $200,000 20,000 units/year produced Selling price $30 Variable cost/unit $10 1. Should I invest in a machine that will increase fixed operating costs by $20,000 to decrease VC/unit by $1 and increase sales by 1,000 units at $30 selling price? 2. What is the current operating breakeven? What is the proposed operating breakeven? Now Proposed Units Sales $ Sales COGS Gross Profit FC (oper. costs) EBIT Now Proposed Units Sales $ Sales COGS Gross Profit FC (oper. costs)...
The following data pertains to Logan Company: Selling price per unit $300.00    Variable expenses per unit...
The following data pertains to Logan Company: Selling price per unit $300.00    Variable expenses per unit    $180.00    Total fixed expenses $54,000    Tax rate 30% a.) Calculate the breakeven point in units. b.) How many units must Kinney sell to earn a before- tax profit of $24,000? c.) If fixed expenses increase by $6,000, and variable expenses decrease by 10%, how many units must be sold to earn an after-tax profit of $28,000?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT