Question 1. Units Sold to Break Even, Unit Variable Cost, Unit Manufacturing Cos
ID: 2961880 • Letter: Q
Question
Question 1. Units Sold to Break Even, Unit Variable Cost, Unit Manufacturing Cost, Units to Earn Target Income
Prachi Company produces and sells disposable foil baking pans to retailers for $3.00 per pan. The variable cost per pan is as follows:
Fixed manufacturing costs totals $286,334 per year. Administrative cost (all fixed) totals $39,046.
Required:
1. Compute the number of pans that must be sold for Prachi to break even.
pans
2. Conceptual Connection: What is the unit variable cost? What is the unit variable manufacturing cost? Round your answers to the nearest cent.
Which is used in cost-volume-profit analysis?
Why?
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3. How many units must be sold for Prachi to earn operating income of $11,880?
pans
4. How much sales revenue must Prachi have to earn operating income of $11,880?
$
Question 2. Multiple-Product Breakeven
Peace River Products Inc. produces and sells yoga-training products: how-to DVDs and a basic equipment set (blocks, strap, and small pillows). Last year, Peace River Products sold 18,000 DVDs and 4,500 equipment sets. Information on the two products is as follows:
Total fixed cost is $90,000.
Required:
1. What is the sales mix of DVDs and equipment sets?
2. Compute the break-even quantity of each product. If required, round your calculations and answers to nearest whole value.
Direct materials $0.29 Direct labor 0.62 Variable factory overhead 0.62 Variable selling expense 0.15Explanation / Answer
let no. of pans =x
total cost= 1.68x+286344+39046
total sales = 3x
Break even is when sales = cost
so3x-1.68x= 325390
so x= 246500
For no. of item to be sold to have x "Profit" Sales- cost= profit calculate x
far sales of such items 3x
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