Exam 5: Cost-Volume-Profit Analysis and Break-Even

Excel hardware is introducing a new product on a new product line of capacity 800 units per week at a production cost of $50 per unit.Fixed costs are $22,400 per week.Variable selling and shipping costs are estimated to be $20 per unit.Excel plan to market the new product at $110 per unit.What is the break-even capacity per week?

Excel hardware is introducing a new product on a new product line of capacity 800 units per week at a production cost of $50 per unit.Fixed costs are $22 400 per week.Variable selling and shipping costs are estimated to be $20 per unit.Excel plan to market the new product at $110 per unit.What would be the weekly net income at 90% of the capacity?

Victor plans to set up an online business selling software applications that he develops and supports.He believes that a price of $130 for his product including the technical support would be competitive.His monthly fixed expenses amount to $850.Victor would hire some college students to provide the technical support of the application paying them for 3 hours at $15 per hour for each client. a)How many clients does Victor need to acquire to break even? b)If he wants to achieve a target profit of $500 monthly,how many clients does he need?

A company has variable costs that are 3/8 the value of their sales revenues.Total net income for the most recent period was a profit of $123 400 and sales were $400 000.The company has started a new marketing campaign that they hope will increase sales,but it will require additional advertising of $11 200.How many sales dollars does the company have to generate in order to remain at the same level of profitability as before the new ad campaign?

Sala pipe fittings produce pipe elbows and reducers from stainless steel.The company can process up to 20 000 tonnes of stainless steel sheets in a year.The company pays the steel company $800 per tonne of stainless steel sheets and each tonne is used to manufacture $2000 worth of elbows and reducers.Variable processing costs are $470 per tonne and fixed processing costs $3.4 million per year at all production levels.Administrative overhead is $3 million per year regardless of the volume of the production.Marketing and transportation costs work out to be $230 per tonne.In order to attain a net income of $2.4 million how many tonnes of steel must be processed this year?

Sunbeam wants to sell microwaves at a unit contribution margin of $42 and a unit contribution rate of 60%.What should be the break even volume if the total cost of production is kept below $10 000.

A company has variable costs that are 1/8 the value of their sales revenues.Total net income for the most recent period was a profit of $50 400 and sales were $500 000.The company has started a new marketing campaign that they hope will increase sales,but it will require additional advertising of $15 000.How many sales dollars does the company have to generate in order to remain at the same level of profitability as before the new ad campaign?

Citizen sells a watch for $35 at a variable cost of $15 per unit and fixed cost of $1 million per annum.Recent recession has seen jump in material cost by $7.What is the change in profit due to recession if Citizen produces and sells 100 000 watches in a year?

A company that makes cell phones has the following cost structure.The have fixed costs of $145 000 per period and manufacturing costs of $15.16 per cell phone.Advertising is expected to be $25 000 per period and a special promotional contest will involve providing a free case for a cost of $5.30 per cell phone.Each cell phone sells for $49.95.What is the break-even point in the number of phones?

Olfert Greenhouses has compiled the following estimates for operations. Capacity is a sales volume of $175 000. Perform a break-even analysis showing a)an algebraic statement of b)a detailed break-even chart.

A company that makes environmental measuring devices has calculated their revenue and costs as follows for the most recent fiscal period: Costs: What is the break-even point in sales dollars?

A company has variable costs that are 4/7 the value of their sales revenues.Total net income for the most recent period was a profit of $53 770 and sales were $420 000.The company has started a new marketing campaign that they hope will increase sales,but it will require additional advertising of $6400.How many sales dollars does the company have to generate in order to remain at the same level of profitability as before the new ad campaign?

The gas division of Power-U-Up plans to introduce a new gas delivery system based on the following accounting information. a)Draw a detailed break-even chart b)Compute the break-even point c)Determine the break-even point as a percent of capacity

Last year,Terrific Copying had total revenue of $475 000,while operating at 60% of capacity.The total of its variable cost is $150 000.Fixed costs were $180 000.If the current selling price,variable costs,and fixed costs are the same as last year,what net income can be expected from revenue of $500 000 in the current year

A local college hospitality restaurant has the best meals in town.The average variable cost per meal is $10.25 and the desserts are $1.25.The restaurant has fixed operating costs of $110 500 per month.They sell the meals and desserts for three times their average variable cost per meal.The college wants to make a monthly profit of $50 000.How many meals must they sell (Round up to nearest whole meal)?

Citizen sells a watch for $35 at a fixed cost of $1 million per annum.Recent recession has seen jump in material cost to $20.What is the new break-even volume of watches per year?

Last year,Terrific Copying had total revenue of $475 000,while operating at 60% of capacity.The total of its variable cost is $150 000.Fixed costs were $180 000.What is Terrific's break-even point expressed in dollars of revenue?

Sala pipe fittings produce pipe elbows and reducers from stainless steel.The company can process up to 20 000 tonnes of stainless steel sheets in a year.The company pays the steel company $800 per tonne of stainless steel sheets and each tonne is used to manufacture $2000 worth of elbows and reducers.Variable processing costs are $470 per tonne and fixed processing costs $3.4 million per year at all production levels.Administrative overhead is $3 million per year regardless of the volume of the production.Marketing and transportation costs work out to be $230 per tonne.Determine the break-even volume in terms of percent capacity utilization.

Trevor,the new owner of the vehicle accessory shop is considering buying sets of winter tires for $299 per set and selling them at $520 each.Fixed costs related to this operation amount to $3 250 per month.It is expected that 18 sets per month could be sold.How much profit will Trevor make each month?

Last year a printing company had total sales of $37 500.The total of its variable costs was $ 15 000,and fixed costs Capacity is at sales maximum of $50 000. a)Calculate the break-even point in b)Draw a detailed break-even chart