A firm is selling two products, chairs and bar stools, each at $50 per unit. Chairs have avariable cost of $30, and bar stools $20. Fixed cost for the firm is $21,000.a. If the sales mix is 1:1 (one chair sold for every bar stool sold), what is the break-evenpoint in dollars of sales? In units of chairs and bar stools? (Round up your unitanswers to the next whole number and round "Break-even point" to the nearestwhole number.)Break-even pointNumber of chairsNumber of barstoolsb. If the sales mix changes to 1:4 (one chair sold for every four bar stools sold), what isthe break-even point in dollars of sales? In units of chairs and bar stools? (Round upyour unit answers to the next whole number and round "Break-even point" to thenearest whole number.)Break-even pointNumber of chairsNumber of barstools$

Break even is the point at which a entity is in a position of no loss and no profit. At this point,…

Answered: A firm is selling two products, chairs…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A firm is selling two products, chairs and bar stools, each at $50 per unit. Chairs have a variable cost of $25, and bar stools $20. Fixed cost for the firm is $20,000. a. If the sales mix is 1:1 (one chair sold for every bar stool sold), what is the break-even point in dollars of sales? In units of chairs and bar stools? b. If the sales mix changes to 1:4 (one chair sold for every four bar stools sold), what is the break-even point in dollars of sales? In units of chairs and bar stools?
Required: 1. Complete the following table. 2. Suppose Sandy Bank sells its canoes for $590 each. Calculate the contribution margin per canoe and the contribution margin ratio. 3. This year Sandy Bank expects to sell 760 canoes for $590 each. Prepare a contribution margin income statement for the company. 4. Calculate Sandy Bank's break-even point in units and in sales dollars. Sandy Bank sells its canoes for $590 each. 5. Suppose Sandy Bank wants to earn $76,000 profit this year. Calculate the number of canoes that must be sold to achieve this target. Sandy Bank sells its canoes for $590 each. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the following table. Note: Round your "Cost per Unit" answers to 2 decimal places. Number of Canoes Produced and Sold Total costs Variable Costs Fixed Costs Total Costs Cost per Unit Required 3 Required 4 Variable Cost per Unit Fixed Cost per Unit Total Cost per Unit $ $ $ 500 Required 5 780 0 0.00
Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $60 per unit and has a CM ratio of 40%. The company’s fixed expenses are $540,000 per year. The company plans to sell 26,000 knapsacks this year. Required: What are the variable expenses per unit? Use the equation method for the following: What is the break-even point in units and in sales dollars? What sales level in units and in sales dollars is required to earn an annual profit of $108,000? What sales level in units is required to earn an annual after-tax profit of $108,000 if the tax rate is 20%? Assume that through negotiation with the manufacturer, Super Sales Company is able to reduce its variable expenses by $3 per unit. What is the company’s new break-even point in units and in sales dollars? (Do not round intermediate calculations. Round your final answers to the nearest whole number.)
Tiktok Company distributes a lightweight lawn chair that sell for P150 per unit. Variable costs are P60 per unit, and fixed costs total P1,800,000 annually. Required: 1. What is the product's CM Ratio?2. Use the CM ratio to determine the break-even point in sales pesos.
Gladstorm Enterprises sells a product for $60 per unit. The variable cost is $20 per unit, while fixed costs are $85,000. Determine the following: Round your answers to the nearest whole number. a. Break-even point in sales units units b. Break-even point in sales units if the selling price increased to $80 per unit units
[The following information applies to the questions displayed below.] Charlevoix Cases makes mobile phone cases. The company has collected the following price and cost characteristics: Sales price Variable costs Fixed costs $ 12.00 per case 5.50 per case 391,950 per year Assume that the company plans to sell 75,300 units annually. Consider requirements (b), (c), and (d) independently of each other. Required: a. What will be the operating profit? b. What is the impact on operating profit if the sales price decreases by 20 percent? Increases by 10 percent? Note: Do not round intermediate calculations. c. What is the impact on operating profit if variable costs per unit decrease by 20 percent? Increase by 10 percent? Note: Do not round intermediate calculations. d. Suppose that fixed costs for the year are 20 percent lower than projected and variable costs per unit are 20 percent higher tha projected. What impact will these cost changes have on operating profit for the year? Will profit…
Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $60 per unit and has a CM ratio of 40%. The company’s fixed expenses are $540,000 per year. The company plans to sell 26,000 knapsacks this year. Required: 1. What are the variable expenses per unit? 2. Use the equation method for the following: a. What is the break-even point in units and in sales dollars? b. What sales level in units and in sales dollars is required to earn an annual profit of $108,000? c. What sales level in units is required to earn an annual after-tax profit of $108,000 if the tax rate is 20%? d. Assume that through negotiation with the manufacturer, Super Sales Company is able to reduce its variable expenses by $3 per unit. What is the company’s new break-even point in units and in sales dollars? (Do not round intermediate calculations. Round your final answers to the nearest whole number.)
Austin Avenue Clothiers pays $52 each for sports coats and has a fixed monthly cost of $780. The store sells the coats for $71 each. (a) What is the linear cost-volume function C(x)? C(x) = (b) What is the linear revenue function R(x)? R(x) = (c) What is the break-even number of coats? (Round your answer up to the nearest whole number.)
Marikina Shoe Manufacturing Company will produce a special-style shoe if the order size is large enough to provide a reasonable profit. For each special -style order, the company incurs a fixed cost of P20,000 for the production set up. The variable cost is P600 per pair, and each pair sells for P800. a. Let x indicate the number of pairs of shoes produced. Develop a mathematical model for total cost of producing x paiars of shoes. b. Let P indicate the total profit. Develop a mathematical model for the total profit realized from an order for x pairs of shoes. c. How large must the order be for Marikina to breakeven?
Give what is being asked?1. If total cost and Expenses is P300,000 at breakeven point how much is the total sales?2. The unit selling price of a product is P20, if the total sales for the month is 5,000 units and this is the breakeven point sales volume.Answer question A-C with yes or no.a. Will there be an income in case 6,000 units were sold?b. Will be there be an income in case 4,000 units were sold?.c. If additional units were sold after selling 5,000 units will there be an income?d. How much is the total cost and expenses if 5,000 units were sold?
Q. Samara Company is the exclusive distributor for a revolutionary bookbag. The product sells for $60 per unit and has a CM ratio of 40%. The company’s fixed expenses are $360,000 per year. The company plans to sell 17,000 bookbags this year. Required:Using the equation method:a. What is the break-even point in units and in sales dollars?b. What sales level in units and in sales dollars is required to earn an annual profit of $90,000?
Assume that you are in charge of pricing for a firm that produces pickles. You have fixed costs of $2,000,000. Variable costs are $0.75 per jar of pickles. You are selling your product to retailers for $0.89. You sell the pickles in cases of 24 jars per case. a. How many jars of pickles must you sell to break even? b. How much must you sell in dollars to break even? c. How many jars of pickles must you sell to break even plus make a profit of $300,000? d. Assume a retailer buys your product for $0.89. His business requires that he prices products with a 35 percent markup on cost. Calculate his selling price. e. Assume you have an MSRP of $1.39 for the pickles. If a retailer has a required 35 percent retailer margin on all products he sells, what is the most he is willing to pay the producer for the pickles? f. A clothing retailer knows that to break even and make a profit he needs to have a minimum retailer margin (also referred to as a contribution margin or gross margin) of at least…

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