QUESTION 1 Determine Tyrion Company’s total variable cost (TVC). Sales (125,000 units) $4,925,000 Total fixed operating...
QUESTION 1
- Determine Tyrion Company’s total variable cost (TVC).
|
Sales (125,000 units) |
$4,925,000 |
||
|
Total fixed operating costs |
$2,687,500 |
||
|
Total fixed financing costs |
$800,000 |
||
|
Operating breakeven quantity of sales |
75,000 units |
||
|
a. |
$256,667 |
||
|
b. |
$376,667 |
||
|
c. |
$445,833 |
||
Homework Answers
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| Correct answer is: c. $445833 | |||
| Workings: | |||
| Let Variable cost per unit be X | |||
| Sales Price per unit ($4925000 / 125000) | = | $ 39 | |
| Variable cost per unit | = | X | |
| Contribution margin per unit | = | $39 - X | |
| Total Fixed operating Cost | = | $ 26,87,500 | |
| Operating Break - even quantity of sales | = | Total Fixed operating Cost / Contribution margin per unit | |
| 75000 | = | $2687500 / ($39 - X) | |
| $39 - X | = | $2687500 / 75000 | |
| $39 - X | = | $ 35.83 | |
| X | = | $ 3.57 | |
| Total Variable cost (TVC) ($3.57 X 125000) | = | $ 4,45,833 | |
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QUESTION 1
Determine Tyrion Company’s total variable cost (TVC).
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