A product is currently made in a job shop, where fixed costs are $20,000 per year and variable cost is $150 per unit. The firm sells the product for $175 per unit. What is the break-even point for this operation? What is the profit (or loss) on a demand of 150 units per year?
Given,
fixed costs are $20,000 per year
variable cost is $150 per unit.
Selling Price Per Unit $175 per unit
Demand 150 units per year
Breakeven Point =?
profit (or loss) =?
Workings: Contribution Per Unit = Selling Price-Cost Price
=$175-$150=$25
Break Even Point = Fixed Cost/ Contribution Per Unit
=$20000/$25= 800 unit
profit (or loss) = Fixed Cost-Contribution
=$20000-$25*150unit= $16250(Loss)
A product is currently made in a job shop, where fixed costs are $20,000 per year...
1.A product is currently made in a process-focused shop, where fixed costs are $8,000 per year and variable cost is $40 per unit. The firm currently sells 200 units of the product at $200 per unit. A manager is considering a repetitive focus to lower costs (and lower prices, thus raising demand). The costs of this proposed shop are fixed costs = $24,000 per year and variable costs = $10 per unit. If a price of $80 will allow 400...
A plant operation has fixed costs of $2,000,000 per year, and its output capacity is 100,000 electrical appliances per year. The variable cost is $40 per unit, and the product sells for $90 per unit. a. What is the break-even point in terms of units? b. What is the break-even point in terms of dollars? c. How much capacity has been used? d. If the variable cost is increased to $55, what is the percent reduction (or increase) to the profit? What is the...
Target Profit Trailblazer Company sells a product for $265 per unit. The variable cost is $120 per unit, and fixed costs are $1,000,500. Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of $350,175. a. Break-even point in sales units units b. Break-even point in sales units if the company desires a target profit of $350,175 units
The Advanced Engineering Economic Company ('AEE') is currently making its product (MEM502) in a process-focused shop, where rental payments are $8000 per year and material costs are $40 per unit. Records show that AEE currently sells 200 units of the product MEM502 for $200 each. As the manager of AEE, you are considering a proposed repetitive focus in order to lowest costs, and hence, lower prices; thereby raising the demand. the proposed shop however, has rental payments of $24,000 per...
Shawn Pen & Pencil Sets Inc. has fixed costs of $309,400. Its product currently sells for $13 per unit and has variable costs of $6.20 per unit. Mr. Bic, the head of manufacturing, proposes to buy new equipment that will cost S390,000 and drive up fixed costs to $433,500. Although the price will remain at $13 per unit, the increased automation will reduce costs per unit to $4.50. a. Compute the following break-even points. (Do not round intermediate calculations.) Current...
Zhao Co. has fixed costs of $245,000. Its single product sells for $155 per unit, and variable costs are $106 per unit. If the company expects sales of 10,000 units, compute its margin of safety in dollars and as a percent of expected sales. Dollars Percent Margin of safety % US-Mobile manufactures and sells two products, tablet computers and smartphones, in the ratio of 4:2. Fixed costs are $90,860, and the contribution margin per composite unit is $118. What number...
1. Break-Even Point Radison Inc. sells a product for $97 per unit. The variable cost is $52 per unit, while fixed costs are $516,375. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $103 per unit. a. Break-even point in sales units ? units b. Break-even point if the selling price were increased to $103 per unit ? units 2. Outdoors Company sells a product for $150 per...
Target Profit Scrushy Company sells a product for $150 per unit. The variable cost is $110 per unit, and fixed costs are $200,000. Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of $50,000. a. Break-even point in sales units units b. Break-even point in sales units if the company desires a target profit of $50,000
Target Profit Outdoors Company sells a product for $270 per unit. The variable cost is $150 per unit, and fixed costs are $348,000. Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of $128,760. a. Break-even point in sales units 2,900 units units b. Break-even point in sales units if the company desires a target profit of $128,760
Bates Company currently produces and sells 5,000 units of a product that has a contribution margin of $5 per unit. The company sells the product for a sales price of $20 per unit. Fixed costs are $20,000. The company has recently invested in new technology and expects the variable cost per unit to fall to $12 per unit. The investment is expected to increase fixed costs by $15,000. After the new investment is made, how many units must be sold...