Our company sells a product fo
Our company sells a product for $150 per unit. Variable costsare $90 per unit and fixed costs are $18,000. The company expectsto sell 800 units this year. How many units must we sell to breakeven?
a) 300
b) 320
c) 360
d) 400
Our company has reviewed the utilities bills for our company. Wehave determined that the highest and lowest bills were $5,600 and$3,200 for the months of January and September. If we produced1,200 and 600 units in these months, what was the variable cost perunit associated with the utilities bill?
a) $4.67
b) $5.33
c) $4.00
d) $5.00
Our company sells its product for $60 per unit and has avariable cost of $30 per unit. Total fixed costs equal $20,000.What would be the breakeven point in units if variable costincreased by $10?
a) 500
b) 667
c) 1,000
d) 1,200
Our company sells its product for $100 per unit and has avariable cost of $40 per unit. Total fixed costs equal $18,000. Thebreakeven in units is 300,and we expect to sell 250 units. What isthe margin of safety in dollars?
a) ($3,000)
b) $3,000
c) ($5,000)
d) $5,000
Answer:
Problem – 1
Option – A
variable cost per unit = 90
Contribution per unit = sale price – variable cost
= 150-90
=60 $ Per unit
breakeven in units
= fixed cost / contribution per unit
= 18000 / 60
= 300 units
Problem-2
Option – C
under high-low cost method
variable cost per unit =
( highest activity cost – lowest activity cost ) / ( highestactivity units – lowest activity units )
= (5600-3200) / (1200-600)
= 2400 / 600
= $ 4 per unit
Problem- 3
Option – C
new vwariable cost per unit = 30+10
= 40 per unit
selling price per unit= 60
variable cost per unit = 40
Fixed cost = 20000 $
Contribution per unit = sale price – variable cost
= 60 -40
=20 $ Per unit
breakeven in units
in units = fixed cost / contribution perunit
= 20000 / 20
= 1000 units
Problem- 4
Option – C
sales price = 100 $ per unit
break even units = 300
Break even sales in dollars = 300 * 100 = $ 30000
Actual sales units = 250 units
Actual sales in doolars = 250 *100 = $ 25000
margin of saftey sales in doolars
= Actual sales – breakeven sales
= (250*100) – (300*100)
= 25000 – 30000
= (5000)
"Our Prices Start at $11.99. As Our First Client, Use Coupon Code GET15 to claim 15% Discount This Month!!"
