Exam 5: Cost-Volume-Profit Analysis and Break-Even

A new smartphone is being sold by Motorola at $650. The fixed cost per month to make these phones is $840 000 and the variable cost per phone is $150. Determine the breakeven volume for Motorola using the contribution margin approach.

Last year, Terrific Copying had total revenue of $475 000, while operating at 60% of capacity. The total of its variable cost is $150 000. Fixed costs were $180 000. What is Terrific's break-even point expressed in dollars of revenue?

Trevor, the new owner of the vehicle accessory shop is considering buying sets of winter tires for $299 per set and selling them at $520 each. Fixed costs related to this operation amount to $3 250 per month. It is expected that 18 sets per month could be sold. How much profit will Trevor make each month?

Samsung sell refrigerators at $900 per unit. Their variable cost is estimated to be $550 per unit and their fixed costs are estimated to be $8.75 million per annum. Calculate the minimum number of units, Samsung should produce every year to make a profit?

Caroline needs to put some money in her pocket this winter, so she plans on removing snow from driveways. She will need to pay $560 for a snow-blower to make her job easier. A variable cost of $3 per job for supplies would also be required. She estimates that she could clean 40 driveways a month. What price should she charge the customers for the service in order to break even?

Excel hardware is introducing a new product on a new product line of capacity 800 units per week at a production cost of $50 per unit. Fixed costs are $22 400 per week. Variable selling and shipping costs are estimated to be $20 per unit. Excel plan to market the new product at $110 per unit. What would be the weekly net income at 90% of the capacity?

A company that makes environmental measuring devices has calculated their revenue and costs as follows for the most recent fiscal period: What is the break-even point in sales dollars?