Question

Calculate Break Even when a given profit is required

1. Fixed Costs a. Fixed Factory Overhead = $1,000,000 b. Fixed Selling overhead = $500,000

2. Variable Costs

a. Variable Manufacturing costs = $1000

b. Variable selling cost per unit = $500

3. Cost Per Unit = $10,000

4. Profit of $250,000 is required ii.

Calculate the CM iii.

Calculate the CM %

Calculate Break Even Point

Answer #1

Cost per unit: | 10000 | ||||

Less: VC per unit (1000+500) | 1500 | ||||

Fixed cost per unit | 8500 | ||||

Total fixed cost (1000000+500000): | 1500000 | ||||

Divide: FC per unit | 8500 | ||||

Units sold | 177 | ||||

CM per unit | |||||

Total fixed cost | 1500000 | ||||

Total profits | 250000 | ||||

Total Contribution | 1750000 | ||||

Divide: Units sold | 177 | ||||

CM per unit | 9887 | ||||

Selling price = 9887 + 1500 = 11387 | |||||

CM ratio = CM per unit / Selling price *100 | |||||

9887/11387 = 86.83% | |||||

Break even units: | |||||

Fixed cost | 1500000 | ||||

Divide: CM per unit | 9887 | ||||

Break even units: | 151.71 | ||||

Break even in$ | |||||

Fixed Cost | 1500000 | ||||

divide: CM ratio | 86.83% | ||||

Break even in$ | 1727514 | ||||

. Assume that the CDE Company has yearly Fixed costs of $30,000
and its Variable costs are $30,000, which are 60% of its Sales.
Calculate:
[Use ONLY formula for your calculations. Do NOT use
algebra]
Question:
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b. The sales level (dollars) required
to break-even.
c. The sales needed to make a profit of
$35,000.
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Michael Company has fixed costs of $1,021,330. The unit selling
price, variable cost per unit, and contribution margin per unit for
the company's two products are provided below.
Product
Selling
Price
Variable
Cost per Unit
Contribution Margin per Unit
Q
$440
$240
$200
Z
560
500
60
The sales mix for products Q and Z is 35% and 65%,
respectively.
Determine the break-even point in units of Q and
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If required, round your answers...

A company's break-even point will not be
increased by:
a) an increase in total fixed costs.
b) a decrease in the selling price per unit.
c) an increase in the variable cost per unit.
d) an increase in the number of units produced and sold.

1. Standard costs and actual costs for factory overhead for the
manufacture of 2,800 units of actual production are as follows:
Standard Costs
Fixed overhead (based on 10,000 hours)
3 hours per unit @ $0.77 per hour
Variable overhead
3 hours per unit @ $1.91 per hour
Actual Costs
Total variable cost, $18,100
Total fixed cost, $8,200
The amount of the variable factory overhead controllable
variance is
a.$2,056 favorable
b.$0
c.$2,056 unfavorable
d.$1,645 favorable

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...

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materials $68
Direct labor $40
Variable overhead $12
Total fixed factory overhead $500,000
Variable selling expense is a commission of 5 percent of price;
fixed selling and administrative expenses total $116,400.
Required:
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The fixed cost of a company is $30,000 p.a. prime cost is $6 per
unit.Variable Overheads are $4 per unit.Selling price is $20 per
unit. Present sales are 20,000 units a year.Calculate the
break-even point in sales and units.
Problem 2
Calculate the break-even point from the following
particulars:
Budgeted output80,000 units
Fixed Expenses$45,000.
Variable Cot Unit$15.00
Selling Cost per unit$25.00
If the selling price is reduce to $20 per unit, what will be the
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The standard costs and actual costs for factory overhead for the
manufacture of 2,900 units of actual production are as follows:
Standard Costs
Fixed overhead (based on 10,000 hours) 3 hours per unit at $0.72
per hour
Variable overhead 3 hours per unit at $1.99 per hour
Actual Costs
Total variable cost, $17,800
Total fixed cost, $7,900
The total factory overhead cost variance is

The standard costs and actual costs for factory overhead for the
manufacture of 2,800 units of actual production are as follows:
Standard Costs
Fixed overhead (based on 10,000 hours)
3 hours per unit at $0.71 per hour
Variable overhead
3 hours per unit at $2.06 per hour
Actual Costs
Total variable cost, $18,000
Total fixed cost, $8,000
The fixed factory overhead volume variance is
a.$0
b.$909 unfavorable
c.$1,136 unfavorable
d.$909 favorable

The standard costs and actual costs for factory overhead for the
manufacture of 2,800 units of actual production are as follows:
Standard Costs
Fixed overhead (based on 10,000 hours)
3 hours per unit @ $0.78 per hour
Variable overhead
3 hours per unit @ $1.91 per hour
Actual Costs
Total variable cost, $17,800
Total fixed cost, $8,100
The variable factory overhead controllable variance is
a.$1,756 favorable
b.$1,756 unfavorable
c.$1,405 favorable
d.$0

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