Wyly Inc. produces and sells a single product. The selling price of the product
ID: 2501313 • Letter: W
Question
Wyly Inc. produces and sells a single product. The selling price of the product is $245,00 per unit and its variable cost is $73.50 per unit. The fixed expense is $417,270 per month. The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.) Lusk Corporation produces and sells 13.900 units of Product X each month. The selling price of Product X is $21 per unit, and variable expenses are $15 per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $74,000 of the $104,000 in fixed expenses charged to Product X would not be avoidable even if the product was discontinued. If Product X is discontinued, the company's overall net operating income would:Explanation / Answer
Solution 4 - Break Even is the point where there is no gain and no loss or we can say that the point where we are able to generate rsuch revenue that we can recover all the variable cost and Fixed cost - Break Even is calculated by Dividing the Fixed Expenses by Contribution per Unit to arrive at Break Even Quantity and then multiply it by Sales price per unit to derive Break Even sales in Dollars
Break Even ( Quantity ) = Fixed Cost / Contribution
Break Even ( Amount ) = Fixed Cost / Contribution x Sales Price per unit
Answer - C - 596100
Solutionm 5 - In this case we need to see howmuch is the operating income of product X and then if discontinued we still have to face a cost of Fixed Expenses which are unavoidable - Below is the comparision data
Given -
Differencial analysis of X & Discontinued X operation
Answer - A - Decreased by $53400
P Selling Price per unit 245 V Variable Cost per unit 73.5 C Contribution ( P-V) 171.5 F Fixed Expenses per month 417270 B Break Even Sales [F /C] x P 596100Related Questions
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