A company manufactures a product that currently sells for $37. The fixed costs are $105,000 per year and the variable costs are $28. The capacity of the production facility is 55,000 units per year. a. How many units must be produced to attain a net income of $60,000 per year?
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- Klamath Company produces a single product. The projected income statement for the coming year is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. 2. Suppose 10,000 units are sold above break-even. What is the operating income? 3. Compute the contribution margin ratio. Use the contribution margin ratio to compute the break-even point in sales revenue. (Note: Round the contribution margin ratio to four decimal places, and round the sales revenue to the nearest dollar.) Suppose that revenues are 200,000 more than expected for the coming year. What would the total operating income be?Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22 each in the coming year. Total variable costs equal 1,086,800. Total fixed costs equal 8,000,000. (Round all ratios to four significant digits, and round all dollar amounts to the nearest dollar.) Required: 1. What is the contribution margin per unit? What is the contribution margin ratio? 2. Calculate the sales revenue needed to break even. 3. Calculate the sales revenue needed to achieve a target profit of 245,000. 4. What if the average price per unit increased to 23.50? Recalculate: a. Contribution margin per unit b. Contribution margin ratio (rounded to four decimal places) c. Sales revenue needed to break even d. Sales revenue needed to achieve a target profit of 245,000Gelbart Company manufactures gas grills. Fixed costs amount to 16,335,000 per year. Variable costs per gas grill are 225, and the average price per gas grill is 600. Required: 1. How many gas grills must Gelbart Company sell to break even? 2. If Gelbart Company sells 46,775 gas grills in a year, what is the operating income? 3. If Gelbart Companys variable costs increase to 240 per grill while the price and fixed costs remain unchanged, what is the new break-even point?
- If a company has fixed costs of $6.000 per month and their product that sells for $200 has a contribution margin ratio of 30%, how many units must they sell in order to break even? A. 100 B. 180 C. 200 D. 2,0002. A firm has the capacity to produce 1,000,000 units of a product per year. At present, it is able to produce and sell 600,000 units yearly at a total income of P720,000.00. Annual fixed costs are P250,000 and the variable costs per unit is P0.70. a. Give the firm's annual profit or loss for this production. b. Give the number of units that should be sold annually to break evenABC Company manufactures the product XE-17. The product is sold at a unit price of $70.Variable expenses are $13.50 per unit and fixed expenses are $220,000 per year.Required :a. What should be the product’s CM ratio? b. Calculate the BEP is sales dollars and in units for ABC Company. c. The manager of ABC company estimates that in the coming year, the company’s sales willincrease by $80,000 (from the current sales). How much should the net profit / loss increase/decrease if the fixed costs remain constant? d. The manager of ABC company predicts that by spending an additional $80,000 per year onadvertising and using higher quality raw material (which will in turn increase the raw materialcost per unit by $3), and increasing selling price per unit by 2% (to compensate for theincreased costs), unit sales will increase by two- thirds of the current sales units. Should thecompany go with the manager’s proposed plan? Explain your answer. (Assume that in thecurrent year, the company sold…
- ABC Company manufactures the product XE-17. The product is sold at a unit price of $70.Variable expenses are $13.50 per unit and fixed expenses are $220,000 per year.Required :a. What should be the product’s CM ratio? b. Calculate the BEP is sales dollars and in units for ABC Company. c. The manager of ABC company estimates that in the coming year, the company’s sales willincrease by $80,000 (from the current sales). How much should the net profit / loss increase/decrease if the fixed costs remain constant? d. The manager of ABC company predicts that by spending an additional $80,000 per year onadvertising and using higher quality raw material (which will in turn increase the raw materialcost per unit by $3), and increasing selling price per unit by 2% (to compensate for theincreased costs), unit sales will increase by two- thirds of the current sales units. Should thecompany go with the manager’s proposed plan? Explain your answer. (Assume that in thecurrent year, the company sold…Planet of the Grapes, Inc. makes a single product that it sells for $40 each. Variable costs are $15 per unit and annual fixed costs total $120,000 per year. The company would like to realize operating income next year of $90,000. What level of sales in dollars must the company achieve to reach its target profit? A. $4,800 B. $192,000 C. $336,000 D. $8,400PROBLEM 5. Austin Company produces a single product. The projected income statement for the coming year follows: Sales (50,000@P40) Variable costs Contribution margin P2,000,000 (1,100,000) 900,000 (765,000) P135,000 Fixed costs Operating income Assume the tax rate is 40 percent. How many units must be sold to earn an after-tax profit of P180,000? 8. What is the selling price that Austin must charge to raise the operating profit by 50 percent based on the given cost structure, still selling 50,000. 7.
- Company XYZ currently produces and sells 40,000 units. At this level, the total contribution margin is $320,000 while the total fixed costs $80,000. If sales are expected to increase by 40% in the next period, how much would the new profit be ($)? O a. 304,000 O b. 336,000 O c. 272,000O O d. 368,000 O e. None of the given answers 11:42 o search W D dx ENG 22-05-2021 hp Tort sc delete home end 96 5. + back space tock T 5 0 enter G K pause 51 ↑ shift 11 2 end alt ctriBeckham Company has the following information available: Selling price per unit: Variable cost per unit: Fixed costs per year: £400,000 Expected sales per year: 20,000 units What is the expected operating income (i.e. profit) for a year? Select one: O A. £500,000 O B. O C. £700,000 £680,000 £100 £55 O D. £480,000PROBLEM 5. Austin Company produces a single product. The projected income statement for the coming year follows: Sales (50,000@P40) Variable costs P2,000,000 (1,100,000) 900,000 Contribution margin Fixed costs (765,000) P135,000 Operating income 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10% of sales? 6. Assume the tax rate is 40 percent. How many units must be sold to breakeven? 7. Assume the tax rate is 40 percent. How many units must be sold to earn an after-tax profit of P180,000? 8. What is the selling price that Austin must charge to raise the operating profit by 50 percent based on the given cost structure, still selling 50,000.