22. CVP Analysis a. XYZ Corporation has $8,000 in fixed costs. Each unit uses $1
ID: 1175257 • Letter: 2
Question
22. CVP Analysis a. XYZ Corporation has $8,000 in fixed costs. Each unit uses $14 in direct materials, $19 in abor, and $2 in variable manufacturing overhead, Each unit sells for $50. How many does XYZ need to sell in order to breakeven? ANSWER: b. Gulpalotta Company pays $30,000 a month in rent, $2000 a month in insurance, $1500 a Product costs include $1500 a month in utilities, and $100 per unit in sales commissions. depreciation on factory equipment, $10 per unit for direct materials, $15 per unit for direct labor, and $5000 per month salary for the production manager. The selling price per unit is $200. The flat tax rate is 40%. How many units do they need to sell in order to achieve an after-tax profit of $60,000? NSWER:_ Bob Smith is studying a report from corporate headquarters concerning his department's weekly production of 10,000 cans of dog food, their only product. The report states that his department $3000 in fixed costs. What was the variable cost per unit for each can of dog food? c. achieved $20,000 in revenues, achieved a profit of $2000, and covered ANSWER:Explanation / Answer
Answer to part a
Fixed cost 8000.direct material 14. direct Labour 19.varuable OH 2 per unit.sales price 50per unit.
Variable cost per unit=14+19+2=35
Contribution =50-35=15
BEP(units) =Fixed cost /contribution per unit=8000/15units
BEP in value=BEP in units*sales price
=(8000/15)*50=$26666.67
ANSWER to part b.
Total fixed cost per month=30000+2000+1500+5000+1500
=40000
Variable cost per unit=100+10+15=125
Sales price =200 contribution=200-125=75
Profit before tax=60000/(1-.40)=100000
No of units to be sold=(fixed cost+profit before tax) /contribution per unit=(40000+100000)/75
=1866.67 units or 1867 units
Answer to part c
Weekly production =10000can
Profit =2000 revenue =20000 fixed cost 3000
Variable cost=revenue - fixed cost-profit=20000-2000-3000
=15000
Variable cost per unit =total variable cost /weekly can production=15000/10000=1.5per unit
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.