8. If a business had sales of $4,494,000 and a margin of safety of 20%, the brea
ID: 2522599 • Letter: 8
Question
8. If a business had sales of $4,494,000 and a margin of safety of 20%, the break-even point was :
a.$5,392,800, b.$898,800, c.$8,089,200, d.$3,595,200
Reynold's Grocery has fixed costs of $298,000, the unit selling price is $23, and the unit variable costs are $20. What is the break-even sales (units) if the variable costs are decreased by $5?
a.99,333 units , b.37,250 units, c.14,900 units, d.19,867 units
Given the following cost and activity observations for Smithson Company's utilities, use the high-low method to calculate Smithson's fixed costs per month. Round your final answer to the nearest dollar. Do not round interim calculations.
Cost
Machine Hours
Timmer Corporation just started business in January. There were no beginning inventories. During the year, it manufactured 12,000 units of product, and sold 10,000 units. The selling price of each unit was $30. Variable manufacturing costs were $4 per unit, and variable selling and administrative costs were $2 per unit. Fixed manufacturing costs were $36,000, and fixed selling and administrative costs were $7,300.
What would Timmer's net income be for the year using absorption costing?
If sales totaled $234,120 for the current year (11,706 units at $20 each) and planned sales totaled $166,387 (12,799 units at $13 each), the effect of the unit price factor on the change in sales is a:
Variable costs as a percentage of sales for Lemon Inc. are 73%, current sales are $621,000, and fixed costs are $178,000. How much will operating income change if sales increase by $36,800?
Cost
Machine Hours
January $27,000 9,800 February 35,100 17,800 March 28,800 11,700 April 31,500 15,100Explanation / Answer
Answer
A. D.$3595200
Margin of safety (sales) = Total sales - Break even sales
4494000*20% = 4494000 - Break even sales
898800 = 4494000 -Break even sales
Break even sales =4494000-898800
Break even sales =$3595200
B.
Ans is B.37250 units
Break even sales = Fixed cost/Contribution per unit
= $298,000 / ($23 - $15)
=$298000 / $8
= 37,250 units
revised variable costs per unit =$20-$5 =$15
C.
Per unit variable cost = $8100 / 8,000 = $1.0125
Fixed cost per month = $27000 - (9800 x $1.0125)
= $17078
(For rest question, please post separate in next question.)
Cost Machine Hours High $35100 17800 Low $27000 9800 Difference $8100 8000Related Questions
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