Benson Corporation is a manufacturing company that makes small electric motors it sells for $40 per unit. The variable costs ofproduction are $25 per motor, and annual fixed costs of production are $300,000 Required a. How many units of product mustBenson make and sell to break even? b. How many units of product must Benson make and sell to earn a $60,000 profit? c. The

The break even sales are the sales where business earns the no profit no loss during the period.

Benson Corporation is a manufacturing company that makes small electric motors it sells for $40 per unit. The variable costs o production are S25 per motor, and annual fixed costs of production are S300,000 Required a. How many units of product mus Benson make and sell to break even? b. How many units of product must Benson make and sell to earn a $60.000 profit? c TH

Benson Corporation is a manufacturing company that makes small electric motors it sells for $40 per unit. The variable costs o production are S25 per motor, and annual fixed costs of production are S300,000 Required a. How many units of product mus Benson make and sell to break even? b. How many units of product must Benson make and sell to earn a $60.000 profit? c TH

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 9E: Gelbart Company manufactures gas grills. Fixed costs amount to 16,335,000 per year. Variable costs...

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Gelbart Company manufactures gas grills. Fixed costs amount to 16,335,000 per year. Variable costs per gas grill are 225, and the average price per gas grill is 600. Required: 1. How many gas grills must Gelbart Company sell to break even? 2. If Gelbart Company sells 46,775 gas grills in a year, what is the operating income? 3. If Gelbart Companys variable costs increase to 240 per grill while the price and fixed costs remain unchanged, what is the new break-even point?
XYZ Company sells a product for $250. The variable cost is $150 per unit. The fixed costs are $300,000. The company wants to have a profit of $400,000. How many units do they have to sell to achieve this goal?
Pimpton Plows sells its product for $50. Its variable cost per unit is $19.00. Fixed costs total $434,000.How many units does the company need to sell to breakeven?What are the total sales in dollars at the breakeven point?How many units does the company need to sell to earn a profit of $155,000?
A company that sells radios has yearly fixed costs of $600,000. It costs the company $45 to produce each radio. Each radio will sell for $65. The company's costs and revenue are modeled by the following functions, where x represents the number of radios produced and sold: C(x) = 600,000 + 45x This function models the company's costs. R(x) = 65x. This function models the company's revenue. Find and interpret (R – C)(20,000), (R – C)(30,000), and (R - C)(40,000).
Shalom Company manufactures Peace Products and sells it at P500 per unit. Variable manufacturing costs to manufacture is P200 per unit, while it incurs P150 per unit to sell. The fixed costs to manufacture and sell are P150,000 and P120,000, respectively. (1) How many units should Shalom Company sell to break-even? (2) If the company targets to earn profit of P300,000, how many units should Company sell?
Zoro, Inc. produces a product that has a variable cost of $6.00 per unit. The company’s fixed costs are $30,000. The product sells for $10.00 a unit and the company desires to earn a $20,000 profit. What is the volume of sales in units required to achieve the target profit? 5,000 7,500 8,333 12,500
It costs the American Automobile Company $8,000 to produce each automobile, and fixed costs (rent and other expenses that do not depend on the amount of production) are $15,000 per week. The company’s price function is , where p is the price at which exactly x cars will be sold. a) How many cars should be produced each week to maximize profit? b) For what price should they be sold? c) What is the company’s maximum profit?
Fellwell is a company producing flight safety parachutes for drones. The cost of producing a parachute can be breakdown into fixed cost of $50000 per year and variable cost of $200 per parachute. (a) Explain how gross profit from selling parachute can be computed. (b) If the company sold the parachute harness at $300 per harness, what is the minimum sales quantity per month for the company to break even? (c) If the company decides to sell the harness at $450 per harness, what is the minimum sales quantity per month to break even? (d) What are the factors that affect whether the company could price its parachute harness at $450 instead of $300?
Marsh Motors sells 5,000 motors a year for $30 apiece. Variable costs are $8 per unit, and total fixed costs are $85,000 a year. If the company wants to earn $6 net income per motor sold, approximately how many motors must it sell?
A company produces a special new type of TV. The company has fixed costs of $487,000, and it costs $1500 to produce each TV. The company projects that if it charges a price of $2500 for the TV, it will be able to sell 750 TVs. If the company wants to sell 800 TVs, however, it must lower the price to $2200. Assume a linear demand. What are the company's profits if marginal profit is $0?
A company invests $16,000 to produce a product that will sell for $45.60. Each unit costs $8.35 to produce. How many units must the company sell to break even? How many units must the company sell to make a profit of $95,000?
Lindon Company is the exclusive distributor for an automotive product. The product sells $40 per unit and has a CM ratio of 30%. The company's fixed expenses are $180,000 per year. Required: 1. What are the variable expenses per unit? 2. Using the equation method: a. What is the break-even point in units and sales dollars? b. What sales level in units and in sales dollars is required to earn an annual profit of $60,000? c. 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 units and in sales dollars? 3. Repeat (2) above using the unit contribution method.