2. A new copier company plans to produce one model of copier. The copiers will sell for $820 each.The annual fixed costs of operation are $5,600,000 and the variable cost is $210 per unit.a. Assuming that they can sell everything they produce at this price, compute the breakevenquantity QBEP.b. If the company actually produces 11,000 copiers the first year, what will the profit/loss be?c. Include a fully-labeled breakeven chart illustrating the problem.3. Fixed and variable cost for three potential facility locations are as shown below.Fixed costVariable costLocationper year$240,000$100,000$150,000per unit$15$30$20a. Plot the total cost lines for these four locations on a single cost-volume graph.b. If expected output is to be 12,000 units per year, which location would provide the lowest cost?c. Identify the range of output over which each location alternative would be preferred (lowestcost). Compute the relevant crossover points, and clearly indicate your conclusion.

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Answered: 2. A new copier company plans to…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 8EB: Shonda & Shonda is a company that does land surveys and engineering consulting. They have an...

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Shonda & Shonda is a company that does land surveys and engineering consulting. They have an opportunity to purchase new computer equipment that will allow them to render their drawings and surveys much more quickly. The new equipment will cost them an additional $1.200 per month, but they will be able to increase their sales by 10% per year. Their current annual cost and break-even figures are as follows: A. What will be the impact on the break-even point if Shonda & Shonda purchases the new computer? B. What will be the impact on net operating income if Shonda & Shonda purchases the new computer? C. What would be your recommendation to Shonda & Shonda regarding this purchase?
Flanders Manufacturing is considering purchasing a new machine that will reduce variable costs per part produced by $0.15. The machine will increase fixed costs by $18,250 per year. The information they will use to consider these changes is shown here.
A product currently sells for $12 per unit. The variable costs are $4 per unit, and 10,000 units are sold annually and a profit of $30,000 is realized per year. A new design will increase the variable costs by 20% and Fixed Costs by 10% but sales will increase to 12,000 units per year. (a) At what selling price do we break even with the new design?. (b) If the selling price is to be kept same ($12/unit) what will the annual profit be?
A mobile manufacturer company plans to produce 50000 mobiles this year. The company will sell for 150 OMR each. The fixed cost of the company 3 million and total variable costs are 5 million OMR. (a) Calculate the break-even point? (b) Suppose the company wanted to produce 100000 mobiles in the next year. How breakeven point will change.
The ABC Corporation is considering introducing a new product, which will require buying new equipment for a monthly payment of $5,000. Each unit produced can be sold for $20.00. ABC incurs a variable cost of $10.00 per unit. Suppose that ABC would like to realize a monthly profit of $50,000. How many units must they sell each month to realize this profit?
A new project will allow you to sell a new product at $61 each. Variable costs are $24 each and fixed costs would run $75,000 per year. If there is no initial investment required, how many units would you have to sell annually to break-even (aka the "accounting break-even quantity")? (Round up to the next whole number of units.) O a. 1800 O b. 2147 O c. 2287 O d. 1778 Oe. 2028
Grove Audio is considering the introduction of a new model of wireless speakers with the following price and cost characteristics. Sales price $ 450.00 per unit Variable costs 210.00 per unit Fixed costs 672,000 per year Required: What number must Grove Audio sell annually to break even? What number must Grove Audio sell to make an operating profit of $180,000 for the year?
Weber Inc., sells its one product for $40 per unit. The variable cost per unit is $24. The fixed cost per year is $16,000a. What is the break-even point in units?b. What is the break-even point in dollars?c. If Weber would like to have $1,000 profit, how many units should be sold?d. If the selling price changes to $34 per unit, what is the new break-even point in units?
A product currently sells for $16 per unit. The variable costs are $8 per unit, and 10,000 units are sold annually and a profit of $30,000 is realized per year. A new design will increase the variable costs by %40 and Fixed Costs by %50 but sales will increase to 32,000 units per year. (a) At what selling price do we break even, and (b) If the selling price is to be kept same ($16/unit) what will the annual profit be?
The purchasing price for a dye press is $30,000. It is expected to provide labour cost savings of $5,000 in year 1. The savings are expected to increase linearly by X$ each year for seven years. Find the dollar value of X such that the purchase price is justified by the labour savings at MARR = 5%.The solution is with $1 of which of the following?65.8067.8069.8071.80None of the above
A manager has determined that a potential new product can be sold at a price of $50 each. The cost to produce the product is $35, but the equipment necessary for production must be leased for $100,000 per year. What is the break-even point? (Round your answer to the nearest whole number.)
Company x uses machines to manufacture x. One machine costs $142,000 and lasts about 5 years before it needs replaced. The operating cost per machine is $7,000 a year. What is the equivalent annual cost of one machine if the required rate of return is 11%?

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