Break-even analysis PLEASE ROUND CORRECTLY AND FOLLOW HWAT THE PROBLEM SAYS THAN
ID: 2765833 • Letter: B
Question
Break-even analysis PLEASE ROUND CORRECTLY AND FOLLOW HWAT THE PROBLEM SAYS THANKS
The Weaver Watch Company sells watches for $22, the fixed costs are $150,000, and variable costs are $11 per watch.
What is the firm's gain or loss at sales of 9,000 watches? Enter loss (if any) as negative value. Round your answer to the nearest cent.
$
What is the firm's gain or loss at sales of 20,000 watches? Enter loss (if any) as negative value. Round your answer to the nearest cent.
$
What is the break-even point? Round your answer to the nearest whole.
units
What would happen to the break-even point if the selling price was raised to $32?
-Select-The result is that the break-even point is higher. The result is that the break-even point remains unchanged. The result is that demand will increase. The result is that the contribution margin decreases. The result is that the break-even point is lower. Item 4
What would happen to the break-even point if the selling price was raised to $32 but variable costs rose to $21 a unit? Round your answer to the nearest whole.
units
Explanation / Answer
Statement showing computations Particulars Amount Selling price per unit 22.00 Variable cost per unit 11.00 Contribution per unit = 22 -11 11.00 Total contribution =9,000*11 99,000.00 Fixed Costs 150,000.00 Income (Loss) (51,000.00) 20,000 Units Total contribution =20,000*11 220,000.00 Fixed Costs 150,000.00 Income (Loss) 70,000.00 BEP in Units = 150,000/11 13,636.36 Selling price per unit 32.00 Variable cost per unit 11.00 Contribution per unit = 32 -11 21.00 BEP in Units = 150,000/22 7,142.86 The result is that the break-even point is lower. Selling price per unit 32.00 Variable cost per unit 21.00 Contribution per unit = 32 -21 11.00 BEP in Units = 150,000/10 13,636.36
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