the amount of sales (units) that would be under Break-Even Sales Under Present a
ID: 2429660 • Letter: T
Question
the amount of sales (units) that would be under Break-Even Sales Under Present and Proposed Conditions $5,103,000 2,520,000 $2,583,000 Gross profit Expenses Selling expenses $1,260,000 Total expenses Income from operations The division of costs between fxed and variable is as follows Fixed Cost of goods sold Selling expenses Administrative 50% Management is considering a plant expansion program that will permit an increase of $420,000 in yearty sales. The expansion will ncrease fixed costs by $42,000, but will not affect the relationship bet Required: 1. Determine the total variable costs and the total fixed costs for the current year, Enter the final answers rounded to the nearest doilar Total variable Total fixed costs 2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year. Enter the final answers rounded to two decimal places Unit variable cost 3. Compute the break-even sales (units) for the current year. Enter the final answers rounded to the nearest whole numberExplanation / Answer
Solution 1:
Solution 2;
Unit variable cost = Total variable costs / Nos of units = $3,339,000 / 85050 = $39.26 per unit
Unit contribution margin = Selling price per unit - Variable cost per unit
= ($5,103,000 / 85050) - $39.26 = $20.74
Solution 3:
Breakeven sales units = Fixed costs / Contribution margin per unit = $1,701,000 / $20.74
= 82015 units
Solution 4:
Total fixed costs under proposed scenario = $1,701,000 + $42,000 = $1,743,000
Breakeven point in units under proposed scenario = $1,743,000 / $20.74 = 84041 units
Note: I have answered first 4 parts of the question as per chegg policy, kindly post separate question for answer of remaining parts.
Computaton of Variable cost & Fixed Cost - Darby Company Particulars Total Variable Cost Fixed Costs Cost of goods sold $2,520,000.00 $1,764,000.00 $756,000.00 Selling Expenses $1,260,000.00 $945,000.00 $315,000.00 Administrative Expenses $1,260,000.00 $630,000.00 $630,000.00 Total $5,040,000.00 $3,339,000.00 $1,701,000.00Related Questions
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