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Accounting: Break-even analysis.

13-6 UBC Company fixed costs are $10,000 per year and variable costs are $20 per unit. Sales price is $28 per unit.
a) What is the contribution margin of the product?
Answer: $8.00
b) Calculate the breakeven point in unit sales and dollars.
Answer: Breakeven in units is 1,250
Breakeven in dollars = $35,000.00
c) What is the operating profit (loss) at:
i) 1,500 units per year?
Answer: $2,000.00 .
ii) 3,000 units per year?
Answer: $14,000.00
d) Plot a breakeven chart using the foregoing figures.

21-4 The following is a list of currency exchange rates for selected countries:
$U.S. a) $U.S. b)
Country Currency Equivalent per ? $100,000
Britain Pound 1.6428 1.4090 60,872 Pounds
Mexico Peso 0.0731 1,367,989 Pesos
Canada Dollar 0.8910 112,233 Dollars
Japan Yen 0.0107 9,345,794 Yen
Europe Euro 1.4090 70,972 Euros

21-13 Sony sells its 50-inch TV in Japan for ¥230,000. In the U.S. this same TV sells for $2,000.
What should the exchange rate be in order for purchasing point parity to exist?
Answer: 230,000 yen equals $2,000 at exchange rate $0.0087 per yen
115.0000 yen per $U.S.


Solution Summary

The problem set deals with topics under accounting: Break-even, contribution margin etc.