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cravetyler3989
06.05.2020 •
Business
Adams Company produces a product that sells for $33 per unit and has a variable cost of $13 per unit. Adams incurs annual fixed costs of $120,000. RequiredDetermine the sales volume in units and dollars required to break even. (Do not round intermediate calculations.)Calculate the break-even point assuming fixed costs increase to $192,000. (Do not round intermediate calculations.)
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Ответ:
Instructions are below.
Explanation:
Giving the following information:
Adams Company produces a product that sells for $33 per unit and has a variable cost of $13 per unit. Adams incurs annual fixed costs of $120,000.
To calculate the break-even point both in dollars and units, we need to use the following formulas:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 120,000/ (33 - 13)
Break-even point in units= 6,000 units
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 120,000/ (20/33)
Break-even point (dollars)= $198,000
Now, for fixed costs= 192,000
Break-even point in units= 192,000/ (33 - 13)= 9,600 units
Break-even point (dollars)= 192,000/ (20/33)= $316,800
Ответ: