Question

4. A manufacturer plans to produce a new type of T-tool. The variable cost per unit...

4. A manufacturer plans to produce a new type of T-tool. The variable cost per unit is expected to be $78.00 and monthly fixed costs are $2860.00. The unit selling price will be $130.00. Current manufacturing capacity is 75 units per month. Answer the following independent questions.

a)How many T-tools have to be sold per month to breakeven?

b) The manufacturer hires another worker to keep up with demand and can now produce 513 T-tools per month. Variable costs per unit remain the same but monthly fixed costs increase by 15%. If the tool unit sale price is increased $136 per T-tool and production is at the new monthly maximum capacity, what is the highest amount of income the manufacturer could receive in a month?

*Please use financial calculator method and show the values being entered for PY, CY, I, N, PMT, FV, PV along with your final answer*

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

*Using financial calculator method is not applicable as we only need to make accounting calculations.

a) Breakeven units are calculated as follows:

b) Fixed cost remain the same. Now higher the company sells higher is profit so lets calculate the profit at maximium capacity:

Reducing units by every unit reduces profits, so this is the highest level of profit.

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
5. A company sells dehumidifiers for $130.00 per unit. The variable cost per unit is expected...
5. A company sells dehumidifiers for $130.00 per unit. The variable cost per unit is expected to be $78.00 and monthly fixed costs are $2860.00. Current capacity is 75 units per month. Answer the following independent questions. Show Caculation by BAII plus caculator.. You are encouraged to draw the timelines for yourself to help you with setting up the logic of how to solve the problem. a) How many dehumidifiers have to be sold per month to breakeven? b) The...
use the following facts sales price = $180 per unit variable cost = $110 per unit...
use the following facts sales price = $180 per unit variable cost = $110 per unit total fixed costs =$ 24,610 targeted net income = $56.240 how many units have to be sold to achieve targeted net income 1) 1,155 2) 963 3) 513 4) 629
The manufacturer of a product that has a variable cost of $2.80 per unit and total...
The manufacturer of a product that has a variable cost of $2.80 per unit and total fixed cost of $133,000 wants to determine the level of output necessary to avoid losses. What level of sales is necessary to break-even if the product is sold for $4.85? Round your answer to the nearest whole number.   units What will be the manufacturer’s profit or loss on the sales of 99,000 units? Round your answer to the nearest dollar. $   If fixed costs...
Gina owns G’s Clay Pots, a manufacturer of clay planting pots of all different sizes. Gina...
Gina owns G’s Clay Pots, a manufacturer of clay planting pots of all different sizes. Gina is considering manufacturing a new product line: ceramic pots. He collects the following estimates for each ceramic pot: Sales price per pot = $28 Direct materials cost per pot = $5 Direct labor cost per pot = $3 Variable utilities costs per pot = $2 In addition to the costs above, Gina must develop a new production line for the ceramic pots. She can...
: The fixed costs are $30,000,000, the variable cost per unit is $4.50, and there is...
: The fixed costs are $30,000,000, the variable cost per unit is $4.50, and there is no expected change in the cost per unit for changes in unit volume. calculate the breakeven volume for GW at the current price of $19.99. Next, consider the relationship between price and break-even volume for GW: What happens to break-even volume when a $5 price increase is made? What about a $5 price decrease?
Shock Electronics sells portable heaters for $57 per unit, and the variable cost to produce them...
Shock Electronics sells portable heaters for $57 per unit, and the variable cost to produce them is $33. Mr. Amps estimates that the fixed costs are $93,000. a. Compute the break-even point in units.    b. Fill in the following table (in dollars) to illustrate that the break-even point has been achieved.    Sales Fixed costs Total variable costs Net profit (loss
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...
Shock Electronics sells portable heaters for $43 per unit, and the variable cost to produce them...
Shock Electronics sells portable heaters for $43 per unit, and the variable cost to produce them is $26. Mr. Amps estimates that the fixed costs are $100,300. a. Compute the break-even point in units.    Break-even point units      b. Fill in the following table (in dollars) to illustrate that the break-even point has been achieved.    Sales Fixed costs Total variable costs Net profit (loss) $0
Price is $10 per unit, variable costs are $4 per unit, and fixed costs are $8...
Price is $10 per unit, variable costs are $4 per unit, and fixed costs are $8 per unit (at current sales volume). How much will the profit change in short term if sales volume is increase by 10 units? ( the new volume is in the relevant range) A. decrease by $20 B. increase by $20 C. increase by $60 D. increase by $100 E. not enough information Show work please
Brummel Corporation manufactures a single product. The selling price is $120 per unit, and variable costs...
Brummel Corporation manufactures a single product. The selling price is $120 per unit, and variable costs amount to $84 per unit. The fixed costs are $42,000 per month (round any units to the next highest full unit). Calculate: (show your calculations and round to 2 decimal places) What is the contribution margin per unit? What is the contribution margin ratio per unit? What is the monthly sales volume (in dollars) at the break-even point? How many units must be sold...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT