Purchase Solution

Break even analysis

Not what you're looking for?

Ask Custom Question

The Varihary Company manufactures 2 products, Sintax and Gremmer, which sell for $10 and $ 15 respectively.

The following Figures apply to the year ended 30 September 2002.

Sintax Gremmer.
Sales $90 000 $30 000
Variable costs per unit $ 6 $ 12

Fixed costs for the company amounted to $ 10 000.

(a) Calculate the number of units of Sintax and Gremmer sold during the year ended 30 September 2002.
(b) Calculate the contribution to sales ratio for each product for the year ended 30 September 2002.
(c) Calculate the contribution to sales ratio for the company for the year ended 30 September 2002.
(d) From the following profit/volume chart for the company for the year ended 30 September 2002 determine the break-even point ,the profit or loss at the present sales figure and the profit or loss at sales of $ 20 000.Indicate clearly whether these are profit or losses.
For the year ended 30 September 2003 the company expects to increase total sales revenue by 10 %, half of the total increase to apply to each product. Unit prices and costs will be unchanged, and fixed costs will remain at $ 10 000.
(e) Calculate the number of units of Gremmer and Sintax which the company expects to sell during the year ending 30 September 2003.
(f) Calculate the contribution to sales ratio for the company for the year ending 30 September 2003.
(g) Draw a profit Volume chart for the company for year ended 30 September 2003, showing break-even point, and profit or loss at the expected sales figure and at sales of $6000.

Please see attached for full question.

Attachments
Purchase this Solution
Solution Summary

Answers questions on break even analysis that determines the sales ration, break even point and profit volume chart.

Solution Preview

See attached file (at the end of the file I have drawn the graph).

The Varihary Company manufactures 2 products, Sintax and Gremmer, which sell for $10 and $ 15 respectively.

The following Figures apply to the year ended 30 September 2002.

Sintax Gremmer.

Sales $90 000 $30 000
Variable costs per unit $ 6 $ 12

Fixed costs for the company amounted to $ 10 000.

(a) Calculate the number of units of Sintax and Gremmer sold during the year ended 30 September 2002.

Answer
Sintax 90 000/10 = 9000

Gremmer 30 000/15 = 2000

(b) Calculate the contribution to sales ration for each product for the year ended 30 September 2002.

Answer

Sintex 10-6 ...

Purchase this Solution
Free BrainMass Quizzes
Learning Lean

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

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

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.

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.

  • 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.

  • 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 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