Case 2: &n
Case 2:
Break-Even Analysis
Data Results
Unit Revenue $900 Total Revenue
Fixed Cost $50,000 Total Fixed Cost
Marginal Cost $400 Total Variable Cost
Postage per unit $10
Fax Machine cost $90
"New Sales" Forecast 300 Profit (Loss)
Confirmed future orders 100
Break-Even Point (Real break even)
If the capital costs were to increase by 20%, what is the maximum discount you could offer on the last 200 products, for new sales forecast of 430 with same profit amount objective?
Homework Answers
Case 2: &n
Case 2: Break-Even Analysis Data Results Unit Revenue $900 Total Revenue Fixed Cost $50,000 Total Fixed Cost Marginal Cost $400 Total Variable Cost Postage per unit $10 Fax Machine cost $90 "New Sales" Forecast 300 Profit (Loss) Confirmed future orders 100 Break-Even Point (Real break even) Assignment 1 questions - solve each of the questions below as a separate functional model on this tab /worksheet If you knew that a 40 % discount on the last 200 units would cause the new sales to increase to a total of...
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MARGINAL COSTING EXERCISES (Original Fl file: 26 KT-perus.xls2) 1. Marginal cost statement Sales revenue less Variable costs = Contribution less Fixed costs Profit units 1.000 1,000 1,000 per unit 100 60 total € 100,000 € 60,000 € 40,000 30,000 € 10,000 € 40 Calculate the following: Contribution-% 40% 75,000 Break-even point in € B/E in unit Safety margin in € Safety margin-% 750 25,000 25% 2 2nd company's variable costs are and fixed monthly costs in euros are 70% of...
Solve by using Excel and its functions. Show your work clearly. 1. Suppose a hospital unit wants to offer a new ser...
Solve by using Excel and its functions. Show your work clearly. 1. Suppose a hospital unit wants to offer a new service. The service has a fixed cost of $200,000. The service has three DRGS. The number of patients for a specific DRG, their average variable costs per unit, and their average price per unit are given in the table below. No. of Patients Variable cost Rate $Price Rate $ DRGI 200 300 450 DRG2 400 DRG3350 1200 1500 900...
Activity 13.3 - Price Calculation – Breakeven Pricing Often a firm will calculate the break-even point...
Activity 13.3 - Price Calculation – Breakeven Pricing Often a firm will calculate the break-even point for a price. That is, if we set the price at $X, then how many units will we need to sell to cover costs (that is, our break-even point). Work through the following two examples to gain a better understanding of this approach. Fixed Costs = $10,000 Variable Costs = $10 Using break-even analysis calculate: 1. How many units need to be sold to...
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1) At the break even point of 400 units, variable cost were $400 and fixed costs...
1) At the break even point of 400 units, variable cost were $400 and fixed costs were $200. how much will the 401st unit sold contribute to operating profit before income taxes? 2) Break even would not change if : a) sales price increases, b) fixed cost decrease, c) sales volume decrease, d) variable cost per unit increase 3) what is break even point in dollars? sales price: $100, variable cost per unit: $40, total fixed cost :$ 120,000 4)...
Your answer is partially correct. Crane Window Cleaners' monthly income statement at several levels of activity...
Your answer is partially correct. Crane Window Cleaners' monthly income statement at several levels of activity is as follows: Windows washed 2,000 4,000 6,000 Sales revenue $ 3,000 $ 6,000 $ 9,000 Cost of goods sold 1,200 2,400 3,600 Gross profit 1,800 3,600 5,400 Operating expenses Advertising expense 400 400 400 Salaries and wages expense 700 900 1,100 Insurance expense 200 200 200 Postage expense 400 800 1,200 Total operating expense 1,700 2,300 2,900 Operating income $ 100 $ 1,300...
2 2 41 5 | Break-even analysis attempts to determine the volume of sales necessary for...
2 2 41 5 | Break-even analysis attempts to determine the volume of sales necessary for a manufacturer to cover costs, or to make revenue equal costs. It is helpful in setting prices, estimating profit or loss potentials, and determining the discretionary costs that should be incurred. The general formula for calculating break-even units is: Break-even = (Total Fixed Costs) / (Unit Selling Price - Unit Variable Cost] In StratSim; total fixed costs can be broken into discretionary marketing expenditures,...
Target Profit Scrushy Company sells a product for $150 per unit. The variable cost is $110...
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
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Target Income and Margin of Safety At the break-even point, sales and costs are exactly equal. However, the goal of most companies is to make a profit. When a company decides that it wants to earn more than the break-even point of income, it must define the amount it thinks it will realistically make. By modifying the break-even equation, the sales required to earn a target or desired amount of profit may be computed. Complete the following: If a company...
MARGINAL COSTING EXERCISES (Original Fl file: 26 KT-perus.xls2) 1. Marginal cost statement Sales revenue less Variable costs = Contribution less Fixed costs Profit units 1.000 1,000 1,000 per unit 100 60 total € 100,000 € 60,000 € 40,000 30,000 € 10,000 € 40 Calculate the following: Contribution-% 40% 75,000 Break-even point in € B/E in unit Safety margin in € Safety margin-% 750 25,000 25% 2 2nd company's variable costs are and fixed monthly costs in euros are 70% of...
Solve by using Excel and its functions. Show your work clearly. 1. Suppose a hospital unit wants to offer a new service. The service has a fixed cost of $200,000. The service has three DRGS. The number of patients for a specific DRG, their average variable costs per unit, and their average price per unit are given in the table below. No. of Patients Variable cost Rate $Price Rate $ DRGI 200 300 450 DRG2 400 DRG3350 1200 1500 900...
Activity 13.3 - Price Calculation – Breakeven Pricing Often a firm will calculate the break-even point for a price. That is, if we set the price at $X, then how many units will we need to sell to cover costs (that is, our break-even point). Work through the following two examples to gain a better understanding of this approach. Fixed Costs = $10,000 Variable Costs = $10 Using break-even analysis calculate: 1. How many units need to be sold to...
PA6-1 Calculating Contribution Margin, Contribution Margin Ratio, Break-Even Point [LO 6-1, 6-2] Hermosa, Inc., produces one model of mountain bike. Partial information for the company follows: 540 780 900 $ 135,000 $ ? $ ? Number of bikes produced and sold Total costs Variable costs Fixed costs per year Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit $ 538.75 Required: 1. Complete the table. (Round your "Cost per Unit" answers to...
Your answer is partially correct. Crane Window Cleaners' monthly income statement at several levels of activity is as follows: Windows washed 2,000 4,000 6,000 Sales revenue $ 3,000 $ 6,000 $ 9,000 Cost of goods sold 1,200 2,400 3,600 Gross profit 1,800 3,600 5,400 Operating expenses Advertising expense 400 400 400 Salaries and wages expense 700 900 1,100 Insurance expense 200 200 200 Postage expense 400 800 1,200 Total operating expense 1,700 2,300 2,900 Operating income $ 100 $ 1,300...
2 2 41 5 | Break-even analysis attempts to determine the volume of sales necessary for a manufacturer to cover costs, or to make revenue equal costs. It is helpful in setting prices, estimating profit or loss potentials, and determining the discretionary costs that should be incurred. The general formula for calculating break-even units is: Break-even = (Total Fixed Costs) / (Unit Selling Price - Unit Variable Cost] In StratSim; total fixed costs can be broken into discretionary marketing expenditures,...
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