Exam 5: Cost-Volume-Profit Analysis

The selling price of a widget is $15 and the fixed cost per month is $4,800. The variable cost per widget is $9. Calculate the revenue per month required to break-even.

A small company can produce 500 dolls per week. The doll retails for $30. The variable costs are $7.50 per doll and fixed costs are $9,000 per week. If fixed costs are increased by 10% per week, by how much will this lower the net income?

Kuldip's factory manufactures toys that sell for $29.95 each. The variable cost per toy is $11, and the total fixed costs for the month are $45,000. What would unit sales have to be to attain a net income over $12,000?

A manufacturing company is considering producing a new product. The variable cost of the new product is $60 per unit, and the total fixed costs are $75,000 for a month. The company could produce 1,500 units per month, and sell the product for $125 each. Calculate the unit contribution margin.

Ace Corporation's variable costs are equal to 43% of sales revenue. Their fixed costs per month are $600,000. Calculate total revenue at the break-even point.

The selling price of a widget is $15 and the fixed cost per month is $4,800. The variable cost per widget is $9. Calculate the contribution margin rate.

Sam manufactures a product that is selling so well, he has decided to expand his operation to 50,000 units per month. The unit cost is $7, estimated fixed costs are $1.8 mil per year and variable costs are $5 per unit. The product currently sells for $20. Use the graphical approach to CVP analysis to solve the following: a) What is the break-even point as a percent of capacity? b) What would the net income be at 75% capacity? c) What would unit sales have to be to attain a net income of $100,000? d) If sales dropped to 50% of capacity, what would the resulting net income be?

The current annual budget for Armstrong Ltd. indicates total revenue of $8,000,000. The total variable costs are $1,600,000 and fixed costs are $5,600,000. Calculate the net income if total revenue for the year falls below the budget by $1,000,000.

Anderson Ltd. Manufactured 10,000 units of a product last year and identified the following manufacturing and overhead costs (V denotes variable cost and F denotes fixed cost). If variable cost and fixed costs remain unchanged, calculate the total cost to produce 12,000 units.

A manufacturing company is studying the feasibility of producing a new product. The selling price is expected to be $56. The new production line would manufacture up to 95,000 units at a variable cost of $35 per unit. Fixed costs would be $400,000. Variable selling and administration expenses would amount to $7. Determine operating income at 95% capacity.

A manufacturing company is studying the feasibility of producing a new product. The selling price is expected to be $24. The new production line would manufacture up to 19,500 units at a variable cost of $7.80 per unit. Fixed costs would be $72,500. Variable selling and administration expenses would amount to $2.20. Determine the units needed to earn operating income of $75,000.

Durable Toys Inc. wants to calculate from recent production data the monthly fixed costs and unit variable costs on its Mountain Trike product line. In the most recent month, it produced 530 Trikes at a total cost of $24,190. In the previous month, it produced 365 Trikes at a total cost of $18,745. What are the fixed costs per month and the unit variable costs?

The Woodstock plant of Goodstone Tires manufactures a single line of automobile tires. In its first fiscal quarter, the plant had total revenue of $4,500,000 and net income of $900,000 from the production and sale of 60,000 tires. In the subsequent quarter, the net income was $700,000 from the production and sale of 50,000 tires. Calculate the unit selling price, the total revenue in the second quarter, the variable costs per tire, and the total fixed costs per calendar quarter.

M Studios retails their own brand of camera that they manufacture in their plant for $500. The plant capacity is 1,000 units per month and variable costs are $225 per camera. Total fixed costs for the year are $2.16 million. If fixed costs increase by 10%, what will be the net income at full capacity?

A manufacturing company is considering producing a new product. The variable cost of the new product is $60 per unit, and the total fixed costs are $75,000 for a month. The company could produce 1500 units per month, and sell the product for $125 each. What sales would result in a net income of $16,000?

A small company can produce 500 dolls per week. The doll retails for $30. The variable costs are $7.50 per doll and fixed costs are $9,000 per week. What is the break-even point expressed as a percent of capacity?

M Studios estimates that it can sell 1,500 camera lenses at $150 each. Total fixed costs are $120,000, and variable costs are $30 per lens. What unit sales are required to break even? What is the profit generated if all units are sold?

M Studios retails their own brand of camera that they manufacture in their plant for $500. The plant capacity is 1,000 units per month and variable costs are $225 per camera. Total fixed costs for the year are $2.16 million. If fixed costs increase by 10%, how many cameras per month would have to be sold to maintain a net income of $49,500?

A company expects to sell 30,000 hats at $35 each. The estimated variable cost of each hat is $12.50, and the fixed costs are estimated to be $450,000. Calculate the break-even point in units and revenue. Use the graphical approach to CVP analysis to solve.

Sherry Tomason is considering the start-up of a delivery company service. She has compiled information on costs as follows: With the cost data provided, determine the fixed costs per month.