Answers and quick explanations to these please as i know its a fair bit! A chang
ID: 2490648 • Letter: A
Question
Answers and quick explanations to these please as i know its a fair bit!
A change in which item would not affect the break-even point?
A)The sales price per unit.
B)The number of units sold.
C)Variable cost per unit.
D)Total fixed costs.
A break-even point can be determined in all the following ways, except:
A)deriving it from a CVP graph.
B)calculating it using a mathematical equation.
C)using regression analysis.
D)calculating it using the contribution margin.
Currently, the selling price per unit of product X is $270. The variable cost per unit is $220 and the total fixed costs are $504,000. If the company required a net profit of $29,000, how many units would need to be sold? Calculate the following: (Round answers to 0 decimal places, e.g. 5,275.)
The contribution margin per unit $________
The number of units to be sold to break even ________
The total sales achieved at break-even $_______
The break-even in units required to make $29,000 net profit _________
Using the above information, a proposal is being evaluated to increase the unit selling price to $290. Calculate the following: (Round answers to 0 decimal places, e.g. 5,275.) The number of units to be sold to break even based on the new selling price ________
The total sales achieved at the new selling price to break even $________
Thank you, much appreciated!
Explanation / Answer
A Changes in selling price, unit variable cost and Total Fixed cost , all will change in CVP equation and will change break even pointy. However, the change in no of units sold will not change the break even point. It will only change the total contribution. So answer is B . No of units sold. B BEP can be determined by CVP graph, by mathematical equation, or by contribution margin analysis. However regression analysis cannot be used for BEP analysis. So Answer is C. Regression analysis. C Details Amt $ Unit selling Price 270 Unit Variable cost 220 m Unit Contribution margin $ 50.00 n Contribution Margin % 18.5% o Total Fixed cost 504,000 Required Net Profit 29,000 p Required Contribution margin 533,000 No of units to be sold for $29000 profit =p/m= 10,660 units Break even point in units=o/m= 10,080 unist Braek even $ sales =o/n= $ 2,721,600.0 Break even in units to make $29000 profit= 10,080 units D Details Amt $ Unit selling Price 290 Unit Variable cost 220 m Unit Contribution margin $ 70.00 n Contribution Margin % 24.1% o Total Fixed cost 504,000 Break even Point in Units=o/m= 7,200 units Break even sales $= $ 2,088,000.00
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