Question

please help with 8,9,10

suncuy variable. Consistent with these assumptions, as volume CVP analysis relies on the assumptions that costs are either strictly fixed or strictly variable. Consistent decreases a total fixed costs decrease. b. total variable costs remain constant c. total costs decrease. d. total costs remain constant. The total contribution margin decreases if sales volume remains the same and a. fixed expenses increase. b. fixed expenses decrease c. variable expense per unit increases. d. variable expense per unit decreases. When a company reaches the breakeven point in sales, fixed costs equal a. the contribution margin. b. total costs. c. variable costs. d. sales e. zero Use the following information to answer Questions 8,9,10 Reliable Racket Company manufactures tennis rackets. Durine given year, fixed costs are expected to be $150,000. Each racket requires >IU OT variable cost to produce and will be sold to retail outlets for $15. What is the breakeven point in dollars? a $300,000 b. $450,000 c. $150,000 d. $90,000 c. $675,000 How many rackets must be sold to earn an annual profit of $20,000? a 4.000 b. 14,000 C. 24.000 d. 34,000 e. 44.000 If 25,000 rackets are sold in a given year and fixed costs are increased to $160,000, the overall profit or loss is a $25,000 profit b. $25,000 loss. c. $35,000 loss d. $45,000 loss e. $45.000 profit

Answer 1

8) Breakeven point in dollars = [$150,000 / ($15 - $10)] X $15 = $450,000

Option b

9) Sales in units = ($150,000 + $20,000) / ($15 - $10) = 34,000

Option d

10) Profit (Loss) = 25,000 ($15 - $10) - $160,000 = ($35,000)

Option c