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Break-even sales

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I need assistance with the following study questions.

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Kray Inc., which produces a single product, has provided the following data for its most recent month of operations:
Number of units produced 2,700
Variable costs per unit:
Direct materials $84
Direct labor $10
Variable manufacturing overhead $7
Variable selling and administrative expense $5
Fixed costs:
Fixed manufacturing overhead $225,000
Fixed selling and administrative expense $156,000

There were no beginning or ending inventories. The unit product cost under variable costing was:

(a) $94
(b) $114
(c) $101
(d) $119

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Blake Corporation, which produces a single product, has provided the following absorption costing income statement for the month of June:

Blake Corporation
Income Statement
For the month ended June 30

Sales (9,700 units) $349,200
Cost of goods sold:
Beginning inventory $ 8,500
Add cost of goods manufactured 101,700
Goods available for sale 110,200
Less ending Inventory 20,100
Cost of goods sold 90,100
Gross margin 259,100
Selling and administrative expenses:
Fixed $ 80,000
Variable 19,400 99,400
Net operating income $ 159,700

During June, the company's variable production costs were $10 per unit and its fixed manufacturing overhead totaled $70,000. A total of 8,000 units were produced during June and the company had 850 units in the beginning inventory. The company uses the LIFO method to value inventories.

The break-even point in units for the month under variable costing would be (rounded):

(a) 6,250 units
(b) 6,402 units
(c) 6,100 units
(d) 7,255 units

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During its first year of operations, Carlos Manufacturing Company incurred the following costs to produce 9,400 units of its product:

Direct materials $6 per unit
Direct labor $3 per unit
Variable manufacturing overhead $12 per unit
Fixed manufacturing overhead $483,630 in total

The company also incurred the following costs in the sale of 6,900 units of product during its first year:

Variable selling and administrative $3 per unit
Fixed selling and administrative $59,000 in total

Assume that direct labor is a variable cost.

If Carlos' absorption costing net operating income for this first year is $117,425, what would its variable costing net operating income be for this first year?

(a) $86,000
(b) $-11,200
(c) $146,250
(d) $104,125

Dearne Company, which has only one product, has provided the following data concerning its most recent month of operations:
Selling price $60

Units in beginning inventory 0
Units produced 6,000
Units sold 4,600
Units in ending inventory 1,400

Variable costs per unit:
Direct materials $21
Direct labor $14
Variable manufacturing overhead $3
Variable selling and administrative $6

Fixed costs:
Fixed manufacturing overhead $41,000
Fixed selling and administrative $74,200

What is the total period cost for the month under the absorption costing approach?

(a) $101,800
(b) $114,300
(c) $100,300
(d) $110,000

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Decaprio Inc. produces and sells a single product. The company has provided its contribution format income statement for June.

If the company sells 9,200 units, its net operating income should be closest to:

(a) $25,900
(b) $36,700
(c) $27,077
(d) $49,900

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The margin of safety in the Flaherty Company is $24,000. If the company's sales are $120,000 and its variable expenses are $80,000, its fixed expenses must be:

(a) $8,000
(b) $32,000
(c) $24,000
(d) $16,000

The following data are available for the Phelps Company for a recent month:

The break-even sales for the month for the company are:

(a) $203,000
(b) $137,500
(c) $148,000
(d) $91,667

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Newham Corporation produces and sells two products. In the most recent month, Product R10L had sales of $28,000 and variable expenses of $6,440. Product X96N had sales of $22,000 and variable expenses of $7,560. And the fixed expenses of the entire company were $32,710. The break-even point for the entire company is closest to:

(a) $32,710
(b) $46,710
(c) $17,290
(d) $45,431

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Taylor, Inc. produces only two products, Acdom and Belnom. These account for 60% and 40% of the total sales dollars of Taylor, respectively. The unit variable expense as a percentage of the selling price is 60% for Acdom and 85% for Belnom. Total fixed expenses are $150,000. There are no other costs.

Assuming that the total fixed expenses of Taylor increase by 30% and the sales mix remains constant, what amount of sales dollars would be necessary to generate a net operating income of $9,000?

(a) $204,000
(b) $464,000
(c) $659,000
(d) $680,000

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Taylor, Inc. produces only two products, Acdom and Belnom. These account for 60% and 40% of the total sales dollars of Taylor, respectively. The unit variable expense as a percentage of the selling price is 60% for Acdom and 85% for Belnom. Total fixed expenses are $150,000. There are no other costs.

What is Taylor's break-even point in sales dollars?

(a) $214,286
(b) $300,000
(c) $150,000
(d) $500,000

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https://brainmass.com/business/sales-revenue/break-even-sales-214244

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________________________________________

Kray Inc., which produces a single product, has provided the following data for its most recent month of operations:
Number of units produced 2,700
Variable costs per unit:
Direct materials $84
Direct labor $10
Variable manufacturing overhead $7
Variable selling and administrative expense $5
Fixed costs:
Fixed manufacturing overhead $225,000
Fixed selling and administrative expense $156,000

There were no beginning or ending inventories. The unit product cost under variable costing was:

(a) $94
(b) $114
(c) $101
(d) $119

________________________________________

Blake Corporation, which produces a single product, has provided the following absorption costing income statement for the month of June:

Blake Corporation
Income Statement
For the month ended June 30

Sales (9,700 units) $349,200
Cost of goods sold:
Beginning inventory $ 8,500
Add cost of goods manufactured 101,700
Goods available for sale 110,200
Less ending Inventory 20,100
Cost of goods sold 90,100
Gross margin 259,100
Selling and administrative expenses:
Fixed $ 80,000
Variable 19,400 99,400
Net operating income $ 159,700

During June, the company's variable production costs were $10 per unit and its fixed manufacturing overhead totaled $70,000. A total of 8,000 units were produced during June and the company had 850 ...

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See Also This Related BrainMass Solution

Allison Radios Break-even Point: dollar sales volume,units of output, operating leverage

In Excel format:

(Break-even point) You are a hard-working analyst in the office of financial operations for a manufacturing firm that produces a single product. You have developed the following cost structure information for this company. All of it pertains to an output level of 10 million units. Using this information, find the break-even point in units of output for the firm.

Return on operating assets = 25%
Operating asset turnover = 5 times
Operating assets = $20 million
Degree of operating leverage = 4 times

(Break-even point and operating leverage) Allison Radios manufactures a complete line of radio and communication equipment for law enforcement agencies. The average selling price of its finished product is $180 per unit. The variable cost for these same units is $126. Allison Radios incurs fixed costs of $540,000 per year.

1. What is the break-even point in units for the company?
2. What is the dollar sales volume the firm must achieve in order to reach the break-even point?
3. What would be the firm's profit or loss at the following units of production sold: 12,000 units? 15,000 units? 20,000 units?
4. Find the degree of operating leverage for the production and sales levels given in part (c).

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