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The manufacturer of a product that has a variable cost of $2.40 per unit and total fixed cost of $125,000 wants to determine the level of output necessary to avoid losses. a. What level of sales is necessary to break-even if the product is sold for $4.15? Round your answer to the nearest whole number. units What will be the manufacturer's profit or loss on the sales of 100,000 units? Round your answer to the nearest dollar. $ b. If fixed costs rise to $166,000, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number. units c. If variable costs decline to $2.00 per unit, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number. units d. If fixed costs were to increase to $166,000, while variable costs declined to $2.00 per unit, what is the new break-even level of sales? Round your answer to the nearest whole number. units e. If a major proportion of fixed costs were noncash (depreciation), would failure to achieve the break-even level of sales imply that the firm cannot pay its current obligations as they come due? Suppose $98,000 of the above fixed costs of $125,000 were depreciation expense. What level of sales would be the cash break-even level of sales? Use the initial variable cost in your calculations. Round your answer to the nearest whole number. units

The manufacturer of a product that has a variable cost of $2.40 per unit and total fixed cost of $125,000 wants to determine the level of output necessary to avoid losses. a. What level of sales is necessary to break-even if the product is sold for $4.15? Round your answer to the nearest whole number. units What will be the manufacturer's profit or loss on the sales of 100,000 units? Round your answer to the nearest dollar. $ b. If fixed costs rise to $166,000, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number. units c. If variable costs decline to $2.00 per unit, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number. units d. If fixed costs were to increase to $166,000, while variable costs declined to $2.00 per unit, what is the new break-even level of sales? Round your answer to the nearest whole number. units e. If a major proportion of fixed costs were noncash (depreciation), would failure to achieve the break-even level of sales imply that the firm cannot pay its current obligations as they come due? Suppose $98,000 of the above fixed costs of $125,000 were depreciation expense. What level of sales would be the cash break-even level of sales? Use the initial variable cost in your calculations. Round your answer to the nearest whole number. units

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 9EB: Baghdad Company produces a single product. They have recently received the result of a market survey...
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The manufacturer of a product that has a variable cost of $2.40 per unit and total fixed cost of $125,000 wants to determine the level of output necessary to avoid losses. a. What level of sales is necessary to break-even if the product is sold for $4.15? Round your answer to the nearest whole number. units What will be the manufacturer's profit or loss on the sales of 100,000 units? Round your answer to the nearest dollar. $ b. If fixed costs rise to $166,000, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number. units c. If variable costs decline to $2.00 per unit, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number. units d. If fixed costs were to increase to $166,000, while variable costs declined to $2.00 per unit, what is the new break-even level of sales? Round your answer to the nearest whole number. units e. If a major proportion of fixed costs were noncash (depreciation), would failure to achieve the break-even level of sales imply that the firm cannot pay its current obligations as they come due? Suppose $98,000 of the above fixed costs of $125,000 were depreciation expense. What level of sales would be the cash break-even level of sales? Use the initial variable cost in your calculations. Round your answer to the nearest whole number. units
Transcribed Image Text:The manufacturer of a product that has a variable cost of $2.40 per unit and total fixed cost of $125,000 wants to determine the level of output necessary to avoid losses. a. What level of sales is necessary to break-even if the product is sold for $4.15? Round your answer to the nearest whole number. units What will be the manufacturer's profit or loss on the sales of 100,000 units? Round your answer to the nearest dollar. $ b. If fixed costs rise to $166,000, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number. units c. If variable costs decline to $2.00 per unit, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number. units d. If fixed costs were to increase to $166,000, while variable costs declined to $2.00 per unit, what is the new break-even level of sales? Round your answer to the nearest whole number. units e. If a major proportion of fixed costs were noncash (depreciation), would failure to achieve the break-even level of sales imply that the firm cannot pay its current obligations as they come due? Suppose $98,000 of the above fixed costs of $125,000 were depreciation expense. What level of sales would be the cash break-even level of sales? Use the initial variable cost in your calculations. Round your answer to the nearest whole number. units
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