Variable cost per unit is $12. The break-even point is 15000 units and $600,000. The required sales is $80,000. The new break-even is 22,500 units and $900,000.
Given,
product that sells for $40 per unit and has a cm ratio of 30%. the company's fixed expenses are $180,000 per year. the company plans to sell 16,000 units this year.
Required to calculate:
1. What are the variable expenses per unit?
2. What is the break-even point in unit sales and in dollar sales?
3. What amount of unit sales and dollar sales is required to attain a target profit of $60,000 per year?
4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $4 per unit.
what is the company's new break-even point in unit sales and in dollar sales? what dollar sales are required to attain a target profit of $60,000?
1.
Variable expenses per unit:
The contribution margin (CM) ratio is 30%, which means that 30% of the selling price covers variable expenses.
Variable expenses per unit = CM ratio * Selling price per unit
Variable expenses per unit = 0.30 * $40 = $12
2.
Break-even point:
Break-even point (in units) = Fixed expenses / Contribution margin per unit
Break-even point (in units) = $180,000 / $12 = 15,000 units
Break-even point (in dollars) = Break-even point (in units) * Selling price per unit
Break-even point (in dollars) = 15,000 * $40 = $600,000
3.
Target profit of $60,000:
Required unit sales for target profit = (Fixed expenses + Target profit) / Contribution margin per unit
Required unit sales for target profit = ($180,000 + $60,000) / $12 = 20,000 units
Required dollar sales for target profit = Required unit sales for target profit * Selling price per unit
Required dollar sales for target profit = 20,000 * $40 = $800,000
4.
New break-even point with reduced variable expenses:
New variable expenses per unit = Variable expenses per unit - Reduction in expenses
New variable expenses per unit = $12 - $4 = $8
New break-even point (in units) = Fixed expenses / Contribution margin per unit (new)
New break-even point (in units) = $180,000 / $8 = 22,500 units
New break-even point (in dollars) = New break-even point (in units) * Selling price per unit
New break-even point (in dollars) = 22,500 * $40 = $900,000
New dollar sales for target profit = (Fixed expenses + Target profit) / Contribution margin ratio (new)
New dollar sales for target profit = ($180,000 + $60,000) / 0.30 = $800,000
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The variable costs per unit are $28, break-even point is 15,000 units ($600,000 sales), and to attain a $60,000 profit per year we need 20,000 units ($800,000 sales). Reducing variable costs per unit by $4 reduces the break-even point to 7,500 units ($300,000), and the target of $60,000 profit is reached at 10,000 units ($400,000).
Explanation:The first step is to calculate the variable expenses per unit. As the contribution margin (CM) ratio is basically the portion of each sale that contributes to covering fixed costs and then generating profits, it equals (Selling Price - Variable Cost) / Selling Price. Rearranging for Variable Cost gives us: Variable Cost = Selling Price - (CM ratio * Selling Price). Substituting the given values: Variable Cost = $40 - (0.30 * $40) = $28.
Next, we calculate the break-even point in both unit and dollar sales. The break-even point in units is the Fixed Costs / (Selling Price - Variable Cost), substituting gives: 180,000 / (40 - 28) = 15,000. To get break-even in dollars, multiply the break-even units * Selling Price, so, 15,000 * $40 = $600,000.
To calculate the unit and dollar sales to reach a target profit of $60,000, add the target profit to the fixed expenses and divide by the unit CM: (180,000 + 60,000) / (40 - 28) = 20,000 units. Dollar sales would then be 20,000 * $40 = $800,000.
Finally, if variable expenses are reduced by $4, the new variable cost per unit is $24, and the break-even point changes to 180,000 / (40 - 24) = 7,500 units or $300,000 in dollar sales. To compute the new sales to attain a target profit of $60,000, we use the formula: (180,000 + 60,000) / (40 - 24) = 10,000 units, which equals $400,000 in dollar sales.
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Laws and agencies do not impact our lives on a daily basis.
True or False
Answer:
false
Explanation:
In the joint planning process, ____________ saves times by allowing planning activities to begin in advance of a formal decision.
In the joint planning process, A Planning Order (PLANORD) is a planning directive providing essential planning guidance and directs the initiation of plan development before the directing authority approves a military COA. It saves times by allowing planning activities to begin in advance of a formal decision.
As the market price of a service increases, more potential sellers will decide to perform that service because: higher prices lead to lower opportunity costs. more potential sellers will find that the market price exceeds their reservation price. higher prices result in higher revenue. it's more prestigious to produce high-priced services.
The audi 5000s was investigated because of reported instances of unintended acceleration. the investigating body concluded that the acceleration was not a result of a system malfunction but was due instead to driver error. however, they also said that the awkward placement of the brake and accelerator pedals was the primary contributor to these driver errors. by designing this part of the 5000s in an ergonomically inefficient manner, audi ignored which of the four basic rights of consumers? the right to be informed the right to choose the right to safety the right to be heard the right to comfort
Haberdash inc. last year reported sales of $12 million and an inventory turnover ratio of 3. the company is now adopting a just-in-time inventory system. if the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 7.5, while maintaining the same level of sales, how much cash will be freed up?
Sales = $12,000,000
Inventory Turnover ratio (old) = 3If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 7.5, while maintaining the same level of sales, the cash that will be freed up is: a. $2,400,000.
Further explanationA haberdasher is a person who sells small articles for sewing, such as buttons, ribbons and zippers in the United Kingdom. Whereas in the United States, the haberdasher refers instead to a retailer who sells men's clothing, including suits, shirts, and neckties.
Haberdash inc. last year reported sales of $12 million and an inventory turnover ratio of 3. the company is now adopting a just-in-time inventory system.
[tex]Inventory turnover ratio_{Old} = \frac{Sales}{Inventory}[/tex]
[tex] 3 =\frac{12,000,000}{I}[/tex] dollar
[tex] 3I = 12,000,000[/tex] dollar
[tex] I = 4,000,000[/tex] dollar
[tex]Inventory turnover ratio_{New} = \frac{Sales}{Inventory}[/tex]
[tex] 7.5 = \frac{12,000,000}{I}[/tex] dollar
[tex] I = \frac{12,000,000}{7.5}[/tex] dollar
[tex]I = 1,600,000[/tex] dollar
Cash freed up = $4,000,000 – $1,600,000 = $2,400,000.
So, If the new system is able to reduce the firm's inventory level and increase the firm's inventory turnover ratio to 7.5, while maintaining the same level of sales, the cash that will be freed up is: a. $2,400,000.
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Subject: business
Chapter: sales
Keywords:
Haberdash, cash, sales, the company, inventory system
kid definition of government
A stock has an expected return of 13 percent, the risk-free rate is 7 percent, and the market risk premium is 8 percent. what must the beta of this stock be?
What basic principles are fundamental to American free enterprise?
Answer:
open opportunity, private property, contracts, voluntary exchange, profit motive, legal equality, and competition (posttest answer)
Explanation:
American free enterprise is based on private property, voluntary exchange, competition, profit motive, and limited government intervention, fostering economic liberty, innovation and prosperity.
Private property rights, voluntary exchange, competition, the profit motive and minimal government intervention are the fundamental tenets of American free enterprise. Individuals ability to own and manage their assets thanks to private property rights encourages investment and economic expansion. Individuals can freely engage in transactions based on mutual consent through voluntary exchange which fosters market efficiency. Multiple businesses competing for customers ensures that innovation, quality and lower prices are fostered.
Profit-driven behavior encourages risk-taking and entrepreneurship, which promotes economic growth. While enforcing laws and regulations to maintain fair competition, protect consumers and build necessary infrastructure, limited government intervention seeks to maintain market freedom. These ideas support economic liberty, self-reliance and prosperity and serve as the cornerstone of the American economic system.
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Small organizations spend an average of ____ of their it budget on security.
Do left-handed or right-handed people make more money? one study1 recorded the hourly earnings for a random sample of american men, of whom were right-handed and were left-handed. the right-handed men earned an average of per hour, while the left-handed men earned an average of per hour. the sample standard deviation for both left-handed and right-handed workers was about . test the hypothesis that the average earnings for left-handed and right-handed men are the same.
People in _______ careers are doers. They are generally active, hands on workers who like working with tools and equipment, are often athletic, and enjoy the outdoors. A realistic B investigative C Artistic D Social
Answer:
realistic
Explanation:
On december 31, 2017, haas engineering's ending inventory was $41,200. on december 31, 2018, haas' ending inventory was $40,000. assuming beginning inventory and cost of goods purchased were the same in both 2017 and 2018, how will haas' cost of goods sold in 2018 differ from its cost of goods sold in 2017?
GoGo Gas and Fab Fuel are among the few large producers of gasoline in the country. Along with other large producers, they have formed a formal organization to control the output and price of gasoline in that country. What is such an organization called?
Ratios that measure the short-term ability of the company to pay its maturing obligations are
What is the probability that this person was a victim of identity theft that occurred from the unauthorized use of a credit card?
Final answer:
The probability of being a victim of credit card identity theft can be calculated using statistics, emphasizing the importance of prompt actions when faced with identity theft.
Explanation:
Identity theft occurs when someone wrongfully acquires and uses personal identification or credit information without permission. In this case, the probability of being a victim of identity theft through the unauthorized use of a credit card can be calculated using statistics.
Given that the population has 1000 people with 995 non-robbers and 5 robbers, if Bob identifies Nancy as a robber with 99% accuracy, the probability of Nancy actually being a robber is approximately 24.92%.
To combat identity theft, individuals should take immediate steps like closing unauthorized accounts, reporting false charges, and correcting credit reports to minimize financial loss and data exposure.
The company president does not believe that the formula should be altered for fear it will tarnish the company's brand
In a ________, many small- and medium-sized local companies compete for relatively small shares of the total market, so focus strategies will likely predominate.
Greg's agrees to buy hal's sports store on condition that he is approved by first state bank for the financing. this approval is
Final answer:
Greg's agreement to buy Hal's sports store is subject to a contingency clause that requires financing approval from First State Bank. If approval is not secured, the condition is not met and the sale may be void.
Explanation:
Greg's agreement to buy Hal's sports store conditioned upon approval by First State Bank for financing is known as a contingency clause in a business purchase agreement. This clause makes the final sale dependent on specific conditions being met, in this case, securing financing. If Greg is not approved for the financing by the bank, the condition is not met, and he is not obligated to complete the purchase of the store.
A business anticipates future operating revenue of $200 million, future operating costs of $150 million, and sunk costs of $60 million. should the business shud donw or remain in operation? explain.
According to economic theory, there is always a trade-off. if luke takes a paid day off of work, is this is a trade-off
Assume that jack, hal, and sophia enter into an agreement for the sale of the restaurant. hal and sophia get a loan from fourth national bank to pay for it. when their first payment is due, they get a letter from bank of north america stating that they bought the loan from fourth national bank. if hal and sophia were to default on the loan, who would have rights under the contract to sue hal and sophia for non-payment?
Palmetto regional hospital has designed an upcoming research project for determining the best methods for improving patient care. the next step the organization must take in the marketing research process is
The countries with the most cinema screens in the world are china and the united states. china has 5806 more cinema screens than the united states whereas the total screens for both countries is 78,994. find the number of cinema screens for both countries.
Using algebra, we solved a two-variable equation to find that the United States has 36,594 cinema screens and China has 42,400 cinema screens.
The question involves finding the number of cinema screens in China and the United States, given that China has 5,806 more screens than the United States and the total number of screens for both countries is 78,994. We can use algebra to find the answer.
Let U represent the number of screens in the United States. Then the number of screens in China will be U + 5,806. According to the information provided, the sum of the screens in both countries is 78,994. So, we can set up the following equation:
U + (U + 5,806) = 78,994
Simplifying the equation, we get:
2U + 5,806 = 78,994
Subtract 5,806 from both sides:
2U = 73,188
Divide both sides by 2:
U = 36,594
This is the number of cinema screens in the United States. Now to find the number of screens in China, we add 5,806 to the U.S. total:
36,594 + 5,806 = 42,400
Therefore, the United States has 36,594 cinema screens and China has 42,400 cinema screens.
Look at the picture of John Harrison painted by artist Philippe Joseph Tassaert.
What is the best reason for adding this picture to Ship's Chronometer from HMS Beagle?
to make the text more engaging by putting a face with Harrison’s name
to emphasize that Harrison is the most important topic in the text
to help the reader understand Harrison’s chronometer better
to encourage the reader to appreciate Harrison’s genius
Answer:
To make the text more engaging by putting a face with Harrison’s name
Explanation:
John Harrison was the inventor of the marine chronometer, which revolutionized marine travel by helping captains accurately calculate their longitude while at sea.
Answer:
A) To make the text more engaging by putting a face with Harrison’s name
Explanation:
Reason for adding this picture to ship's chronometer from HMS Beagle-To aid the reader in comprehending Harrison's chronometer.
The British were quite concerned about how they could create perfect clocks as long as they remained still, but not when they were rattled, and especially not when loading a moving boat.The use of a visual aid always makes the concept more interesting and understandable to the audience. According to the question, the main reason for including Tassaert's picture of John Harrison is to make the text more appealing since it helps put a face to Harrison's name.' It enables readers to grasp the concept more clearly and relate to the chronometer he designed. As a result, option A is the proper response.Learn more about Philippe joseph Tassaert here-
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The citation abc v. u.s., 375 f.2d. 456 (1992) tells the tax researcher that this is a decision by which court?
Vin diesel owns the fredonia barber shop. he employs 6 barbers and pays each a base rate of $1,310 per month. one of the barbers serves as the manager and receives an extra $520 per month. in addition to the base rate, each barber also receives a commission of $5.90 per haircut. other costs are as follows. advertising $280 per month rent $980 per month barber supplies $0.38 per haircut utilities $170 per month plus $0.27 per haircut magazines $20 per month vin currently charges $11.55 per haircut. (a) your answer is partially correct. try again. determine the variable costs per haircut and the total monthly fixed costs. (round variable costs to 2 decimal places,
e.g. 2.25.) total variable cost per haircut
Milton learning centers is a private firm specializing in helping students with learning problems. located around the country, each center employs a manager and several tutors and counselors. the counselors and tutors have a great deal of flexibility to design programs specifically for individual students. in fact, these first-line employees are considered to be the key people in the organization, and the manager's main function is to assist these employees in matters such as scheduling and securing necessary materials. this type of arrangement suggests that milton is an inverted organization.
Which of the following requirements of small businesses does NOT specifically relate to employees? A. OSHA requirements B. Workers' Compensation laws C. Social Security and withholding taxes D. Federal Tax Code provisions
As prosperity and economic development rise, ________ increases as well.
Do they still sell hand boards at dollar tree
Finding hand boards at Dollar Tree depends on the store's changing inventory, which can vary by location and season. It's recommended to check directly with your local store or their website for the most current product availability.
Explanation:The availability of hand boards at Dollar Tree can vary by location and time. Dollar Tree is known for its constantly changing inventory, featuring a wide array of products including seasonal items, home goods, and occasionally, sports and outdoor equipment such as hand boards. To find out if hand boards are currently sold at your local Dollar Tree, it would be best to visit the store directly or contact them. Dollar Tree's website might also list their current product range, but please note that the website may not reflect the most up-to-date inventory found in stores.
When looking for hand boards at Dollar Tree, consider checking during seasonal changes or the beginning of summer, as that's when outdoor and sports-related items are more likely to be stocked. Remember, the inventory at Dollar Tree changes frequently, so what might be available one month could be different the next. If Dollar Tree does not currently have hand boards, they might have them at a later time, or you may find suitable alternatives in the same category.