Question

An engineering consulting firm measures its output in a standard service hour unit, which is a...

An engineering consulting firm measures its output in a standard service hour unit, which is a function of the personnel grade levels in the professional staff.

The variable cost is $60 per standard service hour. The charge-out rate is $80 per hour.

The maximum output of the firm is 150000 hours per year, and its fixed cost is $2000000 per year. For this firm,

(a) What is the breakeven point in standard service hours and in percentage of total capacity?

(b) What is the percentage reduction in the breakeven point if fixed costs are reduced 12%; if variable cost per hour is reduced 12%; and if the selling price per unit is increased by 12%? Give the comments of breakeven point sensitivity.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1


Kindly upvote:)

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
1) Witten Corporation is a service company that measures its output by the number of customers...
1) Witten Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. Fixed Element per Month Variable Element per Customer Served Revenue $ 6,600 Employee salaries and wages $ 55,100 $ 1,000 Travel expenses $ 600 Other expenses $ 43,100 A total of 27 customers were actually servedduring January. The total expenses in the flexible budget for Januarywould...
The following data are given for product DRIM69 Budgeted output for the year:        9800 units Standard...
The following data are given for product DRIM69 Budgeted output for the year:        9800 units Standard details for one unit: Direct materials:                               40 square metres at K5.30 per square metre Direct wages: Bonding department                                   48 hours at K12.50 per hour Finishing department                                  30 hours at K7.60 per hour Budgeted costs and hours per annum: Variable overhead:                                      (K)                                           (hours) Bonding department                                   375000                                   500000 Finishing department                                  150000                                   300000 Fixed overhead:                                           (K)                              ...
Tranquility Care provides home healthcare services at an average price of $70 per hour and incurs...
Tranquility Care provides home healthcare services at an average price of $70 per hour and incurs variable costs of $45 per hour. Assume average fixed costs are $3,600 a month. (Round your answer to the nearest whole unit.) 1. What is the number of hours that must be billed to reach the breakeven point? ​ 2. If the company desires to make a profit of $2,000, how many hours must be completed? ​ 3. The company thinks it can reduce...
1. Mordica Company's standard labor cost per unit of output is $33 ( 3. hours times...
1. Mordica Company's standard labor cost per unit of output is $33 ( 3. hours times $ 11. per hour). During August, the company incurs 2970 hours of direct labor at an hour cost of $12.10 per hour in making 1100 units of finished product. (a) Compute the labor variance (b). Compute the labor quantity variance.
A company uses the following standard costs to produce a single unit of output. Direct materials...
A company uses the following standard costs to produce a single unit of output. Direct materials 6 pounds at $0.90 per pound = $5.40 Direct labor 0.5 hour at $12.00 per hour = $6.00 Manufacturing overhead 0.5 hour at $4.80 per hour = $2.40 During the latest month, the company purchased and used 58,000 pounds of direct materials at a price of $1.00 per pound to produce 10,000 units of output. Direct labor costs for the month totaled $56,350 based...
A company uses the following standard costs to produce a single unit of output. Direct materials...
A company uses the following standard costs to produce a single unit of output. Direct materials 8 pounds at $1.10 per pound = $ 8.80 Direct labor 0.50 hour at $8.00 per hour = $ 4.00 Manufacturing overhead 0.50 hour at $4.30 per hour = $ 2.15 During the latest month, the company purchased and used 76,000 pounds of direct materials at a price of $1.2 per pound to produce 10,000 units of output. Direct labor costs for the month...
Schriever Corporation is an oil well service company that measures its output by the number of...
Schriever Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. Fixed element per month Variable Element per Well Serviced Revenue $ 4,500 Employee salaries and wages $ 57,200 $ 1,100 Servicing materials $ 600 Other expenses $ 31,000 The planning budget for May was based on 36 wells serviced, but a total of 31 wells...
Mordica Company’s standard labor cost per unit of output is $30.00 (2.50 hours x $12.00 per...
Mordica Company’s standard labor cost per unit of output is $30.00 (2.50 hours x $12.00 per hour). During August, the company incurs 2,925 hours of direct labor at an hourly cost of $10.80 per hour in making 1,300 units of finished product. Compute the total, price, and quantity labor variances. (Round answers to 2 decimal places, e.g. 52.75.)
A firm sells three products. Product 1: $57 sales price per unit; $40 variable cost per...
A firm sells three products. Product 1: $57 sales price per unit; $40 variable cost per unit. Product 2: $26 sales price per unit; $13 variable cost per unit. Product 3: $105 sales price per unit; $87 variable cost per unit. In a typical year, 20% of sales units are Product 1, while 40% of sales units Product 2, and 40% of sales units are Product 3. If the firm has $118,036 in fixed costs, what is the firm's breakeven...
Malfoy Corporation is a service company that measures its output by the number of customers served....
Malfoy Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. Fixed Element per Month Variable Element per Customer Served Revenue $ 5,500 Employee salaries and wages $ 43,700 $ 1,100 Travel expenses $ 500 Other expenses $ 43,200 The planning budget for October was based on serving 23 customers, but a total of 19 customers were actually...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT