Exam 5: Applications of Linear Equations

A manufacturer produces a product which it sells for $60 per unit. The variable cost per unit is $20 and the fixed cost per month is $10,000. How many units must be sold per month to break even?

Solve the following problem using the Contribution Margin Approach. The Woodstock plant of Goodstone Tires manufactures a single line of automobile tires. In its first fiscal quarter, the plant had total revenue of $4,500,000 and net income of $900,000 from the production and sale of 60,000 tires. In the subsequent quarter, the net income was $700,000 from the production and sale of 50,000 tires. Calculate the unit selling price, the total revenue in the second quarter, the variable costs per tire, and the total fixed costs per calendar quarter.

Use the Interactive break-even Chart and its accompanying in the textbook's OLC to answer the following problem. To access the chart, follow the instructions given in the NET @ssets box at the beginning of section 5.4 in the text. Huntsville Office Supplies (HOS) is evaluating the profitability of leasing a photocopier for its customers to use on a self-serve basis at 10′ per copy. The copier may be leased for $300 per month plus 1.5′ per copy on a full-service contract. HOS can purchase paper at $5 per 500-sheet ream. Toner costs $100 per bottle, which in normal use will last for 5000 pages. HOS is allowing for additional costs (including electricity) of 0.5′ per copy. a) How many copies per month must be sold in order to break even? b) What will be the increase in monthly profit for each 1000 copies sold above the break-even point?

Determine the slope and y-intercept of each of the following equations: -7a = -89b

Larissa manufactures rings which sell in her boutique for $60 each. For 100 rings, the material cost is $15 each, and estimated fixed costs are $900. How many rings must Larissa sell to break even? Use the graphical approach to CVP analysis to solve.

Use the graphical method to solve the following pair of equations.

Use the Interactive break-even Chart in the textbook's OLC to answer the following problem. To access the chart, follow the instructions given in the NET @ssets box at the beginning of section 5.4 in the text. Leaving other variables unchanged, what effect does increasing the value of FC have on: a. The Fixed Cost (FC) line? b. The Total Cost (TC) line? c. The Total Revenue (TR) line? d. The break-even point?

CD Solutions Ltd. manufactures and replicates CDs for software and music recording companies. CD Solutions sells each disc for $2.50. The variable costs per disc are $1.00. a) To just break even, how many CDs must be sold per month if the fixed costs are $60,000 per month? b) What must sales be in order to have a profit of $7500 per month?

Solve the following set of equations graphically:

Go to the textbook's OLC (www.mcgrawhill.ca/olc/jerome/) and work your way to the Student Edition. In the navigation bar, select "Chapter 5" in the dropdown box. In the list of resources for Chapter 5, select "Links in Textbook" and then click on the link named "Contribution Margin Chart". Use the chart to solve the following problem: Reflex Manufacturing Corp. manufactures composters at a unit variable cost of $43. It sells them for $70 each. It can produce a maximum of 3200 composters per month. Annual fixed costs total $648,000. a) What is the break-even volume per month? b) What is the monthly net income at a volume of 2500 composters per month? c) What is the monthly net income if Reflex operates at 50% of capacity during a recession? d) At what percent utilization would the annual net income be $226,800? e) If fixed and variable costs remain the same, how much do the monthly break-even unit sales change for a $1 increase in the selling price?

Determine the slope and y-intercept of each of the following equations: -8 - 3x = 2y

Use the graphical method to solve the following pair of equations.

Use the graphical method to solve the following pair of equations.

Go to the textbook's OLC (www.mcgrawhill.ca/olc/jerome/) and work your way to the Student Edition. In the navigation bar, select "Chapter 5" in the dropdown box. In the list of resources for Chapter 5, select "Links in Textbook" and then click on the link named "Contribution Margin Chart". Use the chart to solve the following problem: Huntsville Office Supplies (HOS) is evaluating the profitability of leasing a photocopier for its customers to use on a self-serve basis at 10′ per copy. The copier may be leased for $300 per month plus 1.5′ per copy on a full-service contract. HOS can purchase paper at $5 per 500-sheet ream. Toner costs $100 per bottle, which in normal use will last for 5000 pages. HOS is allowing for additional costs (including electricity) of 0.5′ per copy a) How many copies per month must be sold in order to break even? b) What will be the increase in monthly profit for each 1000 copies sold above the break-even point?

Use the graphical method to solve the following pair of equations.

the graphical method to solve the following pair of equations.

Ace Corporation's variable costs are equal to 43% of sales revenue. Their fixed costs per month are $600,000. Calculate the net income on sales of $2,000,000 per month.

Use the graphical approach to CVP analysis to solve the following problem. Clone Computers assembles and packages personal computer systems from brand-name components. Its Home Office PC System is assembled from components costing $1400 per system and sells for $2000. Labour costs for assembly are $100 per system. This product line's share of overhead costs is $10,000 per month. a) How many Home Office Systems must be sold each month to break even on this product line? b) What will be the profit or loss for a month in which 15 Home Office Systems are sold?

Kuldip's factory manufactures toys that sell for $29.95 each. The variable cost per toy is $11, and the total fixed costs for the month are $45,000. Calculate the unit contribution margin.

Solve the following set of equations graphically: