Oren Manis has a division that makes burlap bags for the citrus industry. The division has fixed costs of $20,000 per month, and it expects to sell 60,000 bags per month. If the variable cost per bag is $2.50, what price must the division charge in order to break even? Limau Kasturi Berhad will produce 55,000 widgets next year. Variable costs will equal 30 percent of sales, while fixed costs will total $110,000. At what price must each widget be sold for the company to achieve an EBIT of $95,000?

Oren Manis has a division that makes burlap bags for the citrus industry. The division has fixed costs of $20,000 per month, and it expects to sell 60,000 bags per month. If the variable cost per bag is $2.50, what price must the division charge in order to break even? Limau Kasturi Berhad will produce 55,000 widgets next year. Variable costs will equal 30 percent of sales, while fixed costs will total $110,000. At what price must each widget be sold for the company to achieve an EBIT of $95,000?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 4EB: Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all...

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