ntsBreak-Even AnalysisThe general formula for calculating break-even units isBreak-even Units = Total Fixed Costs / (Unit Selling Price - Unit Variable Cost)In StratSim total fixed costs can be broken into discretionary marketing expenditures as well as fixed costs for plant andoverhead. The selling price is the MSRP less the dealer discount, and the cost of materials and labor make up the variable cost.In this assignment you will allocate fixed costs across a portfolio of products and calculate the break-even units for each product.A firm's production capacity is 1.4 million units, with annual fixed costs of $2.2 billion for depreciation, plant maintenance,corporate marketing, and general overhead. Additional values for the three vehicles produced and sold by the firm are shown inthe table below:Vehicle XVehicle YVehicle ZMSRP$11,800$19,000$44,300Dealer Discount8%13%14%Variable Cost$8,300$11,600$27,900Advertising & Promotion$38,000,000$74,000,000 $99,000,000Previous Unit Sales500,000400,000300,000QUESTION 3Using the original MSRP, recalculate break-even if the advertising and promotion expense for each product is doubled.Break-Even Units0Vehicle Xunits0Vehicle Yunits0Vehicle Zunits

Break Even Point is where a company or an organization is neither in loss nor in profit. It the…

Answered: In StratSim total fixed costs can be…

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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Break-even analysis attempts to determine the volume of sales necessary for a manufacturer to cover costs, or to make revenue equal costs. It is helpful in setting prices, estimating profit or loss potentials, and determining the discretionary costs that should be incurred. The general formula for calculating break-even units is: Total Fixed Costs Break-even Units = Unit Selling Price-Unit Variable Cost In StratSim, total fixed costs can be broken into discretionary marketing expenditures, and fixed costs for plant and overhead. The selling price is the MSRP less the dealer discount, and the cost of materials and labor make up the variable cost. In this assignment, you will allocate fixed costs across a portfolio of products and calculate the break-even units for each product. A firm's production capacity is 1.5 million units, with annual fixed costs of $3.2 billion for depreciation, plant maintenance, corporate marketing, and general overhead. Additional values for the three vehicles…
The background information is provided in the image attached. Solve the following: g) Briefly explain the impact of each of the following scenarios on the contribution margin per unit and thebreak-even point:(i) Sales volume increases(ii) Total fixed cost decreases(iii) Selling price per unit increases(iv) Variable cost per unit increases
In determining the number of Break Even (B-E) units to sell in order to obtain the amount of Breakeven dollars, the equation would show Fixed Costs per unit divided by Contribution Margin (CM) per unit. TRUE FALSE
Which of the following formulas is used to calculate break-even point in units? a.Break-even point in units = Total fixed costs / (Price − Unit variable cost) b.Break-even point in units = Total costs / Unit contribution margin c.Break-even point in units = Sales / Unit variable cost d.Break-even point in units = Sales / Fixed costs
Break-even analysis attempts to determine the volume of sales necessary for a manufacturer to cover costs, or to make revenue equal costs. It is helpful in setting prices, estimating profit or loss potentials, and determining the discretionary costs that should be incurred. The general formula for calculating break-even units is: Total Fixed Costs Break-even Units = Unit Selling Price-Unit Variable Cost In StratSim, total fixed costs can be broken into discretionary marketing expenditures, and fixed costs for plant and overhead. The selling price is the MSRP less the dealer discount, and the cost of materials and labor make up the variable cost. In this assignment, you will allocate fixed costs across a portfolio of products and calculate the break-even units for each product. A firm's production capacity is 1.5 million units, with annual fixed costs of $3.2 billion for depreciation, plant maintenance, corporate marketing, and general overhead. Additional values for the three vehicles…
How do you calculate Break-even Point? Select one: O a. Fixed cost/ Contribution per unit b. Contribution per unit/ Fixed cost c. Fixed cost/ Sales price per unit d. Fixed cost/ Variable cost per unit
The break-even point in unitsis calculated as (fill in the blank) divided by the Contribution Margin in Units. (See your Chapter 20 notes, page 13) Total sales revenue Sales revenue per unit Total variable costs Fixed cost per unit Variable cost per unit Total fixed costs Contribution margin ratio
1. One way management considers their costs is as average costs. Under this approach, managers can calculate both average fixed and average variable costs. Average fixed cost (AFC) is the total fixed costs divided by the total number of units produced, which results in a per-unit cost. Average variable cost (AVC) is the total variable costs divided by the total number of units produced, which results in a per-unit cost. Management knows that long as the price they receive for their products is greater than the per-unit AVC, they are not only covering the variable cost of production, but each boat is making a contribution toward covering fixed costs. True / False 2. Product costs are all those associated with the acquisition or production of goods and products. When products are purchased for resale, the cost of goods is recorded as an asset on the company’s balance sheet. It is not until the products are sold that they become an expense on the income statement. By moving product…
Answer the following: 1. The unit contribution margin is calculated as the difference between: a. selling price and fixed cost per unit. b. selling price and variable cost per unit. c. selling price and product cost per unit. d. fixed cost per unit and variable cost per unit. e. fixed cost per unit and product cost per unit 2. At the break-even point, the total contribution margin is: a. Zero b. Equal to total fixed costs c. Equal to total costs d. Equal to total variable costs 3. A company with a negative margin of safety also has a (an) a. Operating loss b. Operating profit c. Sales above its break-even point d. Sales equal to its break-even point 4. The break-even point is that level of activity where: a. total revenue equals total cost. b.variable cost equals fixed cost. c. total contribution margin equals the sum of variable cost plus fixed cost. d. sales revenue equals total variable cost.…
Using High-Low to Calculate Fixed Cost, Calculate theVariable Rate, and Construct a Cost FunctionRefer to the information for Speedy Pete’s above. Speedy Pete’s controller wants to calculate thefixed and variable costs associated with its cutting-edge delivery service.Required:Using the high-low method, calculate the fixed cost of deliveries, calculate the variable rate perdelivery, and construct the cost formula for total delivery cost
Given the mixed cost function y = $6.50x + $3,000. What does the $6.50 represent? a.Total cost per unit of the cost driver b.The fixed cost per unit c.The slope of the cost function d.Total fixed costs
On the CVP graph, the next unit sold will increase total cost by an amount equal to the Select one: a. Contribution margin ratio b. Selling price per unit c. Selling price per unit minus the variable costs per unit d. Difference between contribution margin and fixed costs e. Variable costs per unit

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