Question

**10)**

In 2017, X Company had the following selling price and per-unit variable cost information:

Selling price | $188 | ||

Variable manufacuting costs | 97 | ||

Variable selling and administrative costs | 30 |

In 2017, total fixed costs were $632,000.

In 2018, there are only two expected changes. Direct material costs
are expected to decrease by $6 per unit, and fixed selling and
administrative costs are expected to increase by $20,000. What must
unit sales be in order for X Company to break even in 2018?

Tries 0/3 |

Answer #1

**Answer** : Unit sales be in order for X Company
to break even in 2018 = 9,731 uniits

**Explanation** :

Variable cost per unit in 2018

= Variable manufacuting costs in 2017 + Variable selling and administrative costs in 2017 - Decrease in Direct material costs.

= $97 + $30 - $6 = $121.

Selling price per unit in 2018 = $188 (unchanged)

Contribution margin per unit in 2018 = Selling price per unit - Variable cost per unit

= $188 - $121 = $67

Total fixed costs in 2018 = Total fixed costs in 2017 + Expected increase.

= $632,000 + $20,000 = $652,000,

**Break even in unit sales (2018)**
= Total fixed costs / Contribution margin per unit

= $652,000 / $67 = **9,731 units**

In 2017, X Company had the following selling price and
per-unit variable cost information:
Selling price $173
Variable manufacuting costs 81
Variable selling and administrative costs 24
In 2017, total fixed costs were $743,000.
In 2018, there are only two expected changes. Direct material
costs are expected to decrease by $5 per unit, and fixed selling
and administrative costs are expected to decrease by $15,000. What
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2018?

In 2017, X Company had the following selling price and per-unit
variable cost information:
Selling Price
165
Variable manufacuting costs
89
Variable selling and administrative costs
13
In 2017, total fixed costs were $679,000.
In 2018, there are only two expected changes. Direct material
costs are expected to increase by $8 per unit, and fixed selling
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Customer service
4,766
Advertising costs
4,594
Factory maintenance
5,023
Direct labor
5,972
Direct materials
4,514
Sales salaries
5,023
Factory utilities
5,153
Research & Development
5,599
Material handling
4,174
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Account
January 1
December 31
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$14,524
$16,900
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14,622
21,768
Finished Goods
14,594
14,594
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