Purchase Solution

Break even analysis

Not what you're looking for?

Ask Custom Question

Exercise 16-17 C-V-P Analysis
The Last Outpost is a tourist stop in a western resort community. Kerry Yost, the owner of the shop, sells hand-woven blankets for an average price of $30 per blanket. Kerry buys the blankets from weavers at an average cost of $21. In addition, he has selling expenses of $3 per blanket. Kerry rents the building for $300 per month and pays one employee a fixed salary of $500 per month.

1.Determine the number of blankets Kerry must sell to break even.
2.Determine the number of blankets Kerry must sell to generate a profit of $1,000 per month.
3.Assume that Kerry can produce and sell his own blankets at a total variable cost of $16 per blanket, but that he would need to hire one additional employee at a monthly salary of $600.

Chapter 22
Based on this information, which of these three companies would probably improve its product costing accuracy most by converting to activity-based costing (ABC)? Explain your answer.
Exercise 22-2 Importance of Manufacturing Overhead Allocation
The percentages of product costs comprised by direct materials, direct labor, and manufacturing overhead for three companies are as follows:
Company A Company B Company C
Direct materials 7% 21% 42%
Direct labor 13 42 49
Manufacturing
overhead 80 37 9
100% 100% 100%
Based on this information, which of these three companies would probably improve its product costing accuracy most by converting to activity-based costing (ABC)? Explain your answer

Purchase this Solution
Purchase this Solution
Free BrainMass Quizzes
Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Lean your Process

This quiz will help you understand the basic concepts of Lean.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Introduction to Finance

This quiz test introductory finance topics.

View More Free Quizzes
Related BrainMass Solutions

  • Sensitivity and Break-even Analyses

    Break-even analysis is a device for determining the point at which sales will just cover total costs. or the break even point for a product is the point where total revenue received equals total costs (TR=TC).

  • Simple & Brief Break-Even Analysis

    353003 Simple & Brief Break-Even Analysis What is a break-even analysis? How can I determine the break-even point? What formula do I use and what are the key variables? A break the break-even analysis determines the break-even point.

  • break-even analysis

    63713 What are the various uses for break-even analysis? Discuss the various uses for break-even analysis.

  • What is break-even analysis and how does it work with cost

    493650 Break-Even Analysis and How Does It Work with Cost What is break-even analysis and how does it work with cost-volume-profit analysis?

  • This post addresses break-even analysis and sales.

    474213 break-even analysis (a) Break-even analysis is of limited use to management because a company cannot survive by just breaking even. Do you agree? Explain. (b) Total fixed costs are $22,000 for Forrest Inc.

  • Various uses for break-even analysis

    47320 Various Uses for Break-Even Analysis Discuss the various uses for break-even analysis. In general, Break even point is the point at which gains equal losses.

  • Break-Even Point for Managerial Accounting

    73435 Break-even point I need to determine what is meant by the term break-even point in regards to Managerial Accounting? I also need to name 3 approaches to break-even analysis and explain how each approach works.

  • Break-Even Analysis

    The revenue is P(40)=$280 Break-Even analysis is demonstrated.

  • CVP Analysis and Break-Even Analysis

    CVP ANALYSIS AND BREAK EVEN POINT CVP can be calculated a couple different ways. The most common is to figure out the break even analysis-either for required sales volume, or minimum price point.

  • Break-even analysis

    23182 Break-even analysis Can you please explain some of the potential ways that break-even analysis can be used by management to make better decisions.

View More Related Solutions