Question

Sales price per unit Variable manufacturing cost per unit Variable sales commissions per unit Variable shipping expense per unit Fixed administrative cost per unit Other fixed costs per unit Average production $44.95 $17.03 $ 3.20 $ 1.14 $ 5.77 $ 1.12 2,100 units per month If Fireware makes 2,500 units, total fixed cost would be? a $6.89 b. $17,225 c. $11,133 d. $14,469 How many units must be sold in order to break even? (round to the nearest whole unit) a. 308 b. 500 c. 614 d. 620 How many units must Fireware sell in order to make a $50,000 profit? (Round to the nearest whole unit.) a. 505 b. 1,090 c. 1,708 d. 2,734

Answer 1

Sol. - Here, the total fixed Cost will be Calculated using the average production given in the question Total fixed Cost per unit) = fixed Administrative cost per Wenit + Otheir fixed lost ber weit + $ 1.12 $ 5.77 $ 6.89 Total fixed Cost = ) = Average production & fixed Cost per unit $ 6.89 = 2,100 Vuit's * = $14,469 Obtion (el) is right . . Sol. - Break-even point (In vuil's) Total fixed Cost Contribution Margin per Unit A. Saules price per unit $44.95 B.lesso Variable Costso- Variable Manufacturing Cost per unit $(17.03). Variable Salle's Commission per unit $ ( 3.20) Variable Shipping Expense fer Unit $(1.14) Total Venricible lost ber buit $(21.37) 6 Coutribution Martin Deep Huit (A - B). | $23.58 Break-even point (In units): $14,469 $23.58 613.61 OR 614 Unil's = Option (C.) 614 Units

Required Comkeribution for target profit => = fixed Cost & Desired Profit $50,000 = $14,469 + $64,469 Unit's to be sold to earn target Profit - Required Contribution Contribution Margin per unit $ 64,469 $ 23.58 2.734.05 Units OR = 2734 Vuilas option (dl.) 2,734 Juilis. Sel C. Manufacturing related Costs are initially recorded as expenses. There are two type of or two Categories of Cost "Inventoriable costs and period Cost Inventoriqhle Corts are the Costs incurred in the manufacturing of a product. These Corts are initially recorded in the balance sheet as Current assets and do not appear in the income statement Until the foost vul is Sold. ma

ON Something In simple word expenses refers to our flow of money from the kocluck or accoul of any Individual or an. entity with the objective of acquiring or producing The term Manufacturing Costs usually refers to material Used, direct labor Incurred, and Overhead incurred in the manuellecturing business Maheriand used direct laber and manufacturing Overhead at the time incurred are not expenses, rather they incurred Costs These Costs are initially recorded in the balance Shreat as "Current assed and do not appear in the Income Statement Until the first unit Sould.