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allhailkingmilkdud
22.06.2021 •
Business
Frank Corporation manufactures a single product that has a selling price of $25.00 per unit. Fixed expenses total $64,000 per year, and the company must sell 8,000 units to break even. If the company has a target profit of $19,000, sales in units must be:.a. 9,648b. 8,760c. 10,375d. 10,560
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Ответ:
Break-even point in units= 10,375
Explanation:
Giving the following information:
Selling price= $25
Fixed cost= $64,000
Break-even point in units= 8,000
First, we need to determine the unitary contribution margin:
Break-even point in units= fixed costs/ contribution margin per unit
8,000 = 64,000 / contribution margin per unit
contribution margin per unit8,000= 64,000
contribution margin per unit= 64,000 / 8,000
contribution margin per unit= $8
Now, the number of units to be sold to make a profit of $19,000:
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= (64,000 + 19,000) / 8
Break-even point in units= 10,375
Ответ:
High Tech Manufacturing
a. Contribution margin per unit:
Selling price = $25
Variable cost $18.60
Contribution $6.40
Contribution margin percentage:
Contribution/Selling price * 100
= $6.40/$25 * 100
= 25.6%
Total contribution margin:
Sales Revenue ($25 * 120,000) = $3,000,000
Variable cost ($18.60 * 120,000) = 2,232,000
Total Contribution = $768,000
b. Monthly operating income if the company sold 160,000 units:
Sales Revenue ($25 * 160,000) = $4,000,000
Variable cost ($18.60 * 160,000) = 2,976,000
Total Contribution = $1,024,000
Fixed manufacturing overhead $241,900
Fixed selling and administrative
expenses 327,900
Total Expenses $569,800
Operating Income $454,200
c. What would the company's monthly operating income be if the company had sales of $4,500,000?
Sales volume = $4,500,000/$25 = 180,000 units
Sales Revenue ($25 * 180,000) = $4,500,000
Variable cost ($18.60 * 180,000) = 3,348,000
Total Contribution = $1,152,000
Fixed manufacturing overhead $241,900
Fixed selling and administrative
expenses 327,900
Total Expenses $569,800
Operating Income $582,200
d. Break-even point in units = Fixed costs/Contribution per unit
= $569,800/$6.4
= 89,031 units
Break-even point in sales dollars = Fixed costs/Contribution margin ratio
= $569,800/25.6%
$2,225,781.25
e. Sales unit to earn a Target profit of $260,100:
= (Fixed Costs + Target profit)/Contribution per unit
= ($569,800 + $260,100)/$6.40
= 129,672 units
f. If direct labor costs increase by 10% and fixed costs increase by $22,500, units to sell to break even per month:
= $592,300/$5.63
= 105,204 units
g. Current operating leverage factor = Contribution margin / Net operating income
= $768,000/198,200
= 3.87
h. = 27.12%
Sales Revenue ($25 * 128,400) = $3,210,000
Variable cost ($18.60 * 128,400) = 2,388,240
Total Contribution = $821,760
Fixed Costs $569,800
Operating income $251,960
Increase operating income = $53,760 ($251,960 - $198,200)
Percentage increase = $53,760/198,200 * 100
= 27.12%
i. Margin of safety as a percentage of sales:
Margin of safety = (Sales Minus Break-even Sales)/Sales * 100
= ($3,000,000 - $2,225,781)/$3,000,000 * 100
= 3.91%
Explanation:
Price and Cost Data and Calculations:
Relevant range = 200,000 units per month
Sales price per unit: (current monthly sales volume is 120,000 units) $25
Variable costs per unit:
Direct materials 6.60
Direct labor 7.70 + 1.1 = $8.47
Variable manufacturing overhead 2.40
Variable Manufacturing Costs $16.70
Variable selling and administrative expenses 1.90
Total variable costs per unit $18.60 New = $19.37
Total contribution margin:
Sales Revenue ($25 * 120,000) = $3,000,000
Variable cost ($18.60 * 120,000) = 2,232,000
Total Contribution = $768,000
Total fixed costs = $569,800
Operating income = $198,200
New Contribution = $25 - 19.37 = $5.63
Contribution margin ratio = $5.63/$25 * 100 = 22.52%
Monthly fixed expenses:
Fixed manufacturing overhead $241,900
Fixed selling and administrative expenses 327,900
Total fixed costs = $569,800
New fixed costs = $569,800 + $22,500 = $592,300