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Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
Edition 6ISBN: 978-1305103962Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
Edition 6ISBN: 978-1305103962 Exercise 48
Break-Even Units, Operating Income, Margin of Safety
Kallard Manufacturing Company produces t-shirts screen-printed with the logos of various sports teams. Each shirt is priced at $13.50 and has a unit variable cost of $9.85. Total fixed cost is $197,600.
Required:
1. Compute the break-even point in units. (Note: Round answer to the nearest whole unit.)
2. Suppose that Kallard could reduce its fixed costs by $23,500 by reducing the amount of setup and engineering time needed. How many units must be sold to break even in this case?
( Note : Round answer to the nearest whole unit.)
3. CONCEPTUAL CONNECTION How does the reduction in fixed cost affect the break-even point? Operating income? The margin of safety?
Kallard Manufacturing Company produces t-shirts screen-printed with the logos of various sports teams. Each shirt is priced at $13.50 and has a unit variable cost of $9.85. Total fixed cost is $197,600.
Required:
1. Compute the break-even point in units. (Note: Round answer to the nearest whole unit.)
2. Suppose that Kallard could reduce its fixed costs by $23,500 by reducing the amount of setup and engineering time needed. How many units must be sold to break even in this case?
( Note : Round answer to the nearest whole unit.)
3. CONCEPTUAL CONNECTION How does the reduction in fixed cost affect the break-even point? Operating income? The margin of safety?
Explanation
Verified
Verified
Break-even point:
Break-even point is a...
Cornerstones of Managerial Accounting 6th Edition by Maryanne Mowen,Don Hansen ,Dan Heitger
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