Dunia Kids Company produces toys and plans to produce a small game. The new game will be sold for 3 dinars each. There is enough capacity in the company to produce just 16,000 units of the game each month. The variable expenses for manufacturing and selling one unit will be 1,250 dinars and the fixed costs associated with the game will be 35,000 dinars per month. The company's marketing department expects that the demand for the new game will exceed the sufficient production capacity, which requires renting an additional manufacturing space from another company at a fixed cost of 1,000 dinars per month. The variable costs in the leased facility amount to 1,400 dinars per unit due to the somewhat less efficient operations compared to the required main plant. Calculate the monthly break-even point in units and dinars. How many units must be sold to achieve a profit of 12,000 dinars per month. If the sales manager receives a deductible of 100 fils for each unit sold that exceeds the break-even point, how many units must be sold each month to achieve a target profit equal to 25% of fixed costs? 5:29 PM

Dunia Kids Company produces toys and plans to produce a small game. The new game will be sold for 3 dinars each. There is enough capacity in the company to produce just 16,000 units of the game each month. The variable expenses for manufacturing and selling one unit will be 1,250 dinars and the fixed costs associated with the game will be 35,000 dinars per month. The company's marketing department expects that the demand for the new game will exceed the sufficient production capacity, which requires renting an additional manufacturing space from another company at a fixed cost of 1,000 dinars per month. The variable costs in the leased facility amount to 1,400 dinars per unit due to the somewhat less efficient operations compared to the required main plant. Calculate the monthly break-even point in units and dinars. How many units must be sold to achieve a profit of 12,000 dinars per month. If the sales manager receives a deductible of 100 fils for each unit sold that exceeds the break-even point, how many units must be sold each month to achieve a target profit equal to 25% of fixed costs? 5:29 PM

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 5EB: Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90....

See similar textbooks

Similar questions

Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90. The companys monthly fixed expenses are $180,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of October when they will sell 10,000 units. How many units will Cadre need to sell in order to realize a target profit of $300,000? What dollar sales will Cadre need to generate in order to realize a target profit of $300,000? Construct a contribution margin income statement for the month of August that reflects $2,400,000 in sales revenue for Cadre, Inc.
Micro Enterprises has the capacity to produce 10,000 widgets a month, and currently makes and sells 9,000 widgets a month. Widgets normally sell for $6 each, and cost an average of $5 to make, including fixed costs. The monthly fixed costs are $18,000. Coyote Corp. has offered to buy 1.000 widgets at $4 each. On this information alone, should Micro accept the offer? A. No, because it will lose $1 per unit B. No, because it will ose $2 per unit C No, because it will exceed capacity D. Yes, because it makes $1 per unit in the short run E. Unable to determine
Disk City, Inc., is a retailer for digital video disks. The projected net income for the current year is $200,000 based on a sales volume of 200,000 video disks. Disk City has been selling the disks for $16 each. The variable costs consist of the $10 unit purchase price of the disks and a handling cost of $2 per disk. Disk City's annual fixed costs are S600,000. Management is planning for the coming year, when it expects that the unit purchase price of the video disks will increase 30 percent. (Ignore income taxes.) Required: 1. Calculate Disk City's break-even point for the current year in number of video disks.
The Chimes Clock Company sells a particular clock for $40. The variable costs are $23 per clock and the breakeven point is 230 clocks. The company expects to sell 280 clocks this year. If the company actually sells 430 clocks, what effect would the sale of additional 150 clocks have on operating income? Explain your answer. The sale of an additional 150 clocks would operating income by the amount of The total effect would amount to
Disk City, Inc., is a retailer for digital video disks. The projected net income for the current year is $2,260,000 based on a sales volume of 270,000 video disks. Disk City has been selling the disks for $17 each. The variable costs consist of the $5 unit purchase price of the disks and a handling cost of $2 per disk. Disk City’s annual fixed costs are $440,000. Management is planning for the coming year, when it expects that the unit purchase price of the video disks will increase 20 percent. (Ignore income taxes.) Required:1. Calculate Disk City’s break-even point for the current year in number of video disks. (Round your final answer up to nearest whole number.)2. What will be the company’s net income for the current year if there is a 15 percent increase in projected unit sales volume?3. What volume of sales (in dollars) must Disk City achieve in the coming year to maintain the same net income as projected for the current year if the unit selling price remains at $17? (Do not…
A recently retired professor, Melinda Marketing, plans to establish the Hot-Air FanCompany and manufacture circulating fans. She estimates the fixed cost of operations tobe $357,500 annually. The variable cost of producing the fans is forecasted to be $85 perunit.a. How many fans must be sold to break even if the fans are priced at $150?b. If Hot-Air sells 6,000 fans, what will be the EBIT?c. If Hot-Air sells 6,000 fans and has interest expense of $8,125, what is Hot-Air’stimes-interest-earned? Hot-Air does not have any nonoperating expenses.d. If the fans are priced at $150, what is Hot-Air’s breakeven sales?
You need 1,000 units of product Y per month. You currently make product Y in-house at a cost of $7/unit, which consists of $2/unit of fixed costs and $5/unit of variable costs. An outside supplier has offered to manufacture product Y for you at a wholesale price of $2 per unit. If you outsource the production of Y to the outside supplier in the short term, your profit will: increase by $3,000 decrease by $2,000 remain the same decrease by $3,000 increase by $2,000
Disk City, Inc., is a retailer for digital video disks. The projected net income for the current year is $2,340,000 based on a sales volume of 290,000 video disks. Disk City has been selling the disks for $17 each. The variable costs consist of the $5 unit purchase price of the disks and a handling cost of $2 per disk. Disk City's annual fixed costs are $560,000. Management is planning for the coming year, when it expects that the unit purchase price of the video disks will increase 30 percent. (Ignore income taxes.) Required: 1. Calculate Disk City's break-even point for the current year in number of video disks. (Round your final answer up to nearest whole number.) 2. What will be the company's net income for the current year if there is a 20 percent increase in projected unit sales volume? 3. What volume of sales (in dollars) must Disk City achieve in the coming year to maintain the same net income as projected for the current year if the unit selling price remains at $17? (Do not…
The Tick Tock Clock Company sells a particular clock for $75. The variable costs are $15 per clock and the breakeven point is 230 clocks. The company expects to sell 280 clocks this year. If the company actually sells 355 clocks, what effect would the sale of additional 75 clocks have on operating income? Explain your answer The sale of an additional 75 dlocks would aller an. operating income by the amount of The total effect would amount to 4
A producer of chairs is considering the addition of a new plant to absorb the backlog of demand that now exists. The primary location being considered will have fixed costs of $10000 per month and a variable costs of $1.50 per unit produced. Each item is sold to the retailers at a price that averages $2.10 per unit. a. What volume per month is required to break even? b. What profit would be realized on a monthly volume of 65000 units? c. What volume is needed to obtain a profit of $15000 per month? d. What volume is needed to provide a revenue of $23000 per month
Mortech makes digital cameras for drones. Their basic digital camera uses $80 in variable costs and requires $1,500 per month in fixed costs. Mortech sells 200 cameras per month. If they process the camera further to enhance its functionality, it will require an additional $45 per unit of variable costs, plus an increase in fixed costs of $1,000 per month. The current price of the camera is $200. The marketing manager is positive that they can sell the same amount and charge a higher price for the improved version. At what price level would the upgraded camera begin to improve operational earnings?
"Disk City, Inc., is a retailer for digital video disks. The projected net income for the current year is $200,000 based on a sales volume of 200,000 video disks. Disk City has been selling the disks for $16 each. The variable costs consist of the $10 unit purchase price of the disks and a handling cost of $2 per disk. Disk City’s annual fixed costs are $600,000. Management is planning for the coming year, when it expects that the unit purchase price of the video disks will increase 30 percent. (Ignore income taxes.). "Required: 1.Calculate Disk City’s break-even point for the current year in number of video disks. 2.What will be the company’s net income for the current year if there is a 10 percent increase in projected unit sales volume? 3.What volume of sales (in dollars) must Disk City achieve in the coming year to maintain the same net income as projected for the current year if the unit selling price remains at $16? 4.In order to cover a 30 percent increase in…