Question 35
At the end of 2009, Gilley Company implemented a new labor process and redesigned its product with the expectation that input usage efficiency would increase. Now, at the end of 2010, the president of the company wants an assessment of the changes on the company's productivity. The data needed for the assessment are as follows:

2009 2010
Output 30,000 36,000
Output prices $10 $10
Materials (lbs.) 15,000 15,300
Materials unit price $3 $4
Labor (hrs.) 12,000 11,250
Labor rate per hour $5 $5
Power (kwh) 7,500 9,750
Price per kwh $2 $3

How much income was generated in 2009?
a) $300,000
b)$180,000
c)$120,000
b)$213,300

Question 34
Sarah Smith, a sole proprietor, has the following projected figures for next year:

Selling price per unit $150.00
Contribution margin per unit $45.00
Total fixed costs $630,000

What is the break-even point in dollars?
a) $426,000
b)$2,100,000
c)$189,000
d)$900,000

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question 35
At the end of 2009, Gilley Company implemented a new labor process and redesigned its product with the expectation that input usage efficiency would increase. Now, at the end of 2010, the president of the company wants an assessment of the changes on the company's ...

Solution Summary

Response provides steps to compute the break-even point in dollars

Thorpe Corporation sells products for $15 each that have variable costs of $10 per unit. Thorpe's annual fixed cost is $300,000.
User the per unit contribution margin approach to determine the break-evenpoint in units and dollars.

The LJB Company contribution income statement for the most recent month is presented below:
See attached word doc for figures
Compute the company's contribution margin percentage and break-evenpoint in both units and dollars.

Given the following data:
Selling price per unit 1.8
Variable production cost per unit 0.2
Fixed production cost 2,660
Sales commission per unit 0.2
Fixed selling expenses 1,260
The break-evenpoint in dollars is:
2,800
5,040
3,920
3,420

Sales ( 30,000 caps @ $50)- 1,500,000
Less vairable expenses- 900000
contribution margin- 600000
less fixed expenses- 280000
net income- 320000
Find the contribution margin and the break even point in both units and dollars.

Maxson Products distributes a single product, a woven basket whose selling price is $8 and whose variable cost is $6 per unit. The company's monthly fixed expense is $5,500.
Required:
Solve for the company's break-evenpoint in unit sales using the equation method.
Solve for the company's break-evenpoint in sales dollars

You own a company that manufactures and sells widgets. Your sales for last year were $100,000. Each widget sells for $8.50. The cost of material for each widget is $4.00 and last years labor cost was $285,000.00. The fixed costs for the operation are $185,000. What is the break-even in widgets and dollars.

What is a break-evenpoint? If an organization's fixed costs increase, what happens to the break-evenpoint? How can the break-evenpoint be lowered? Why is the break-even analysis an important tool for management? When evaluating a company, how might this information be used?

How many units must Braxton Company sell to break even if the selling price per unit is $8.50, variable costs are $4.30 per unit, and fixed costs are $3,780? What is the breakeven point in total dollars of sales?

Smith Company sells a single product at a selling price of $30 per unit. Variable costs are $12 per unit and fixed costs are $41,400. Smith's break even point in either units or sales dollars is:
a) 1,380 units
b) $69,000
c) 3,450 units
d) $207,000
e) none of the above