Question

Dime a Dozen Diamonds makes synthetic diamonds by treating carbon. Each diamond can be sold for $140. The materials cost for a standard diamond is $40. The fixed costs incurred each year for factory upkeep and administrative expenses are $203,000. The machinery costs $1.4 million and is depreciated straight-line over 10 years to a salvage value of zero.

**a.** What is the accounting break-even level of
sales in terms of number of diamonds sold? **(Do not round
intermediate calculations.)**

**b.** What is the NPV break-even level of diamonds
sold per year assuming a tax rate of 21%, a 10-year project life,
and a discount rate of 14%? **(Do not round intermediate
calculations. Round your answer to the nearest whole
number.)**

Answer #1

Dime a Dozen Diamonds makes synthetic diamonds by treating
carbon. Each diamond can be sold for $100. The materials cost for a
standard diamond is $40. The fixed costs incurred each year for
factory upkeep and administrative expenses are $217,000. The
machinery costs $2.6 million and is depreciated straight-line over
10 years to a salvage value of zero.
a. What is the accounting break-even level of sales in terms
of number of diamonds sold? (Do not round intermediate
calculations.)
b....

Dime a Dozen Diamonds
makes synthetic diamonds by treating carbon. Each diamond can be
sold for $130. The materials cost for a standard diamond is $80.
The fixed costs incurred each year for factory upkeep and
administrative expenses are $206,000. The machinery costs $1.2
million and is depreciated straight-line over 10 years to a salvage
value of zero.
a.
What is the accounting break-even level of sales in terms of number
of diamonds sold? (Do not round intermediate
calculations.)
b....

4. Dime a Dozen Diamonds makes synthetic diamonds by treating
carbon. Each diamond can be sold for $100. The material cost for a
standard diamond is $40. The fixed costs incurred each year for
factory upkeep and administrative expenses are $200,000. The
machinery costs $1 million and is depreciated straight-line over 10
years to a salvage value of zero. a) What is the accounting
break-even level of annual sales in terms of number of diamonds
sold? Assume the company is...

Problem 10-11 Break-Even (LO3)
Dime a Dozen Diamonds makes synthetic diamonds by treating
carbon. Each diamond can be sold for $120. The materials cost for a
standard diamond is $70. The fixed costs incurred each year for
factory upkeep and administrative expenses are $215,000. The
machinery costs $2.3 million and is depreciated straight-line over
10 years to a salvage value of zero.
a. What is the accounting break-even level of
sales in terms of number of diamonds sold?
b. What...

Modern Artifacts can produce keepsakes that will be sold for $80
each. Nondepreciation fixed costs are $2,800 per year, and variable
costs are $40 per unit. The initial investment of $5,000 will be
depreciated straight-line over its useful life of 5 years to a
final value of zero, and the discount rate is 12%. a. What is the
accounting break-even level of sales if the firm pays no taxes? (Do
not round intermediate calculations. Round your answer to the
nearest...

CollegePak Company produced and sold 79,000 backpacks during the
year just ended at an average price of $39 per unit. Variable
manufacturing costs were $16.50 per unit, and variable marketing
costs were $3.78 per unit sold. Fixed costs amounted to $549,000
for manufacturing and $223,200 for marketing. There was no year-end
work-in-process inventory. (Ignore income taxes.)
Required:
Compute CollegePak’s break-even point in sales dollars for the
year. (Do not round intermediate calculations.
Round your final answer up to the nearest...

You are considering investing in a company that cultivates
abalone for sale to local restaurants. Use the following
information:
Sales price per abalone
=
$43.50
Variable costs per abalone
=
$10.70
Fixed costs per year
=
$454,000
Depreciation per year
=
$135,000
Tax rate
=
25%
The discount rate for the company is 17 percent, the initial
investment in equipment is $945,000, and the project’s economic
life is 7 years. Assume the equipment is depreciated on a
straight-line basis over...

ou are considering investing in a company that cultivates
abalone for sale to local restaurants. Use the following
information:
Sales price per abalone = $44.40
Variable costs per abalone = $11.15
Fixed costs per year = $490,000
Depreciation per year = $120,000
tax rate = 24%
The discount rate for the company is 16 percent, the initial
investment in equipment is $960,000, and the project’s economic
life is 8 years. Assume the equipment is depreciated on a
straight-line basis over...

We are evaluating a project that costs $844,200, has a nine-year
life, and has no salvage value. Assume that depreciation is
straight-line to zero over the life of the project. Sales are
projected at 80,000 units per year. Price per unit is $54, variable
cost per unit is $38, and fixed costs are $760,000 per year. The
tax rate is 23 percent, and we require a return of 10 percent on
this project.
a-1.
Calculate the accounting break-even point....

Anu’s Amusement Center has collected the following data for
operations for the year.
Total revenues
$
1,792,000
Total fixed costs
$
571,200
Total variable costs
$
1,024,000
Total tickets sold
64,000
a. What is the average selling price for a
ticket?
b. What is the average variable cost per
ticket?
c. What is the average contribution margin per
ticket? (Do not round intermediate
calculations.)
d. What is the break-even point? (Do
not round intermediate calculations.)
e. Anu has decided that...

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