O Break-Even Sales Under Present and Proposed Conditions Keaney Company, operati
ID: 2562820 • Letter: O
Question
O Break-Even Sales Under Present and Proposed Conditions Keaney Company, operating at full capacity, sold 400,000 units at a price of s$246.60 per unit during 20Ys. tts income statement for 20YS Is as follows Sales Cost of goods sold Grous peof 598,640000 554,140000 Selling expenses 58,000,000 Total expernses Income from operations The division of costs between fixed and variable ias follaws Rxed Varlable Cost ofl goods sold us considering a-expension program that wil pennt an increase of $8.631,000 (3s.oco·mts at S24660 per untjmywy MI" The opaesen mif- t. Debermine for 20YS the total fed costs and the total variabie cots Total fixed Total variabile ct 2. Determine for 2ovS (a) the usit varable cost and (b) the unit contribution margin (b) ene 5 0Explanation / Answer
Answer 1. Fixed Cost Variable Cost Cost of Goods Sold Fixed - $44,500,000 X 28% 12,460,000 Variable - $44,500,000 X 72% 32,040,000 Selling Expenses: Fixed - $8,000,000 X 25% 2,000,000 Variable - $8,000,000 X 75% 6,000,000 Administration Expenses: Fixed - $3,000,000 X 80% 2,400,000 Variable - $3,000,000 X 20% 600,000 Total 16,860,000 38,640,000 Answer 2(a). Total Variable Cost 38,640,000 No. of Units Produced 400,000 Variable Cost per Unit 96.60 Answer 2(b). Sales Price Per Unit 246.60 Variable Cost per Unit 96.60 Contribution per Unit 150.00
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.