Exam 5: Cost-Volume-Profit Analysis

Cando Manufacturing makes lamps that retail at $200 each. The unit variable cost is $120, and the fixed costs are $720,000 per year. Cando can produce a maximum of 2,000 lamps per month. At what percent utilization would the monthly net income be $52,000?

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 exceeds the budget by $1,000,000.

Samantha manufactures rings which sell in her boutique for $60 each. For 100 rings, the material cost is $15 each, and estimated fixed costs are $900. How many rings must Larissa sell to beak-even?

Triax Corp. produced 50,000 gizmos at a total cost of $1,600,000 (including $400,000 of fixed costs) in the fiscal year just completed. If fixed costs and unit variable costs do not change next year, how much will it cost to produce 60,000 gizmos?

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 number of units that must be sold to return a net income of $2,100 per month.

Shannon Vale is considering the start-up of a service company. She has compiled information on costs as follows: With the cost data provided, determine the fixed costs and variable cost per km.

Enrique is studying the feasibility of producing a new product. His existing facilities could be expanded to manufacture 2,000 new units per month. The unit cost is $75. Estimated fixed costs are $3.36 mil per year and variable costs are $25 per unit. Competitors sell a similar product for $350 each. Use the graphical approach to CVP analysis to solve the following: a) What would the net income be at 80% capacity? b) What would unit sales have to be to attain a net income of $100,000? c) If sales dropped to 60% of capacity, what would the resulting net income be?

A company makes gadgets selling for $15 each. For 20,000 gadgets, the cost is $3 each, and the estimated fixed costs are $150,000. What is the break-even volume and revenue?

A company expects to sell 30,000 ball 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 contribution margin per unit and the break-even point in units and revenue.

Cando Manufacturing makes lamps that retail at $200 each. The unit variable cost is $120, and the fixed costs are $720,000 per year. Cando can produce a maximum of 2,000 lamps per month. What is the break-even volume per month?

How many units must be sold per month to break even?

A new product is expected to sell for $12. The company would manufacture up to 22,000 units at a variable cost of $5 per unit. Fixed costs would be $150,000. Variable selling and administration expenses would amount to $2.50. Determine the contribution margin per unit and contribution margin rate.

Cando Manufacturing makes lamps that retail at $200 each. The unit variable cost is $120, and the fixed costs are $720,000 per year. Cando can produce a maximum of 2,000 lamps per month. At what percent utilization would the monthly net income be $44,000?

A small business calculates that its monthly fixed costs are $3,200. If the business calculates it contribution rate to be 0.42, what level of monthly sales must be generated in order to break even?

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 per unit.

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 budgeted net income.