1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Volgvan
3 years ago
15

Factory X manufactures steam cleaners for engines and has a high level of sales variability. The units sell for $3,200 each but

each unit contains about $1,280 in components and direct labor cost. Factory X also keeps the plant open even when sales are low at a cost of approximately $1,000,000 per year. List some examples of fixed costs for a typical manufacturing plant.
How much are the variable costs in this example?
The cost of the variable costs in this example are
What is the break-even level of units in this example?
What is the break-even level of sales in this example?
Business
1 answer:
Scilla [17]3 years ago
4 0

Answer:

a. Some examples of fixed costs are; Insurance, utility charges, and Rent.

b. Variable cost=$1,280

c. Fixed costs=$1,000,000

d. Break-even level of units=521 units

e. Break-even level of sales=$1,667,200

Explanation:

a.

Fixed costs are the expenses that do not change with the level of output, while the variable costs depend on the amount of output produced. The fixed costs typically stay the same with the production levels. The variable costs on the other hand change as the production changes.

Some examples of fixed costs in a typical manufacturing plant are;

1. Insurance

2. Utility charges

3. Rent

4. Property taxes

b.

The variable costs are the Material and labor costs, since a higher or a lower level of output will affect the quantity of materials and labor needed. Thus their costs change with the output.

Variable cost=material cost+labor costs=$1,280

c.

The fixed costs=$1,000,000 since they don't vary with the sales. Sales is a direct function of the output.

d. The break even point is the point at which the Revenue from sales equal the costs. This can be expressed as;

Revenue=price per unit×number of units sold

where;

price per unit=$3,200

number of units sold=n

replacing;

Revenue=3,200×n=3,200 n

Total cost=fixed cost+(cost per unit×number of units)

fixed cost=$1,000,000

cost per unit=$1,280

number of units=n

replacing;

Total costs=1,000,000+(1,280×n)=1,280 n+1,000,000

Since at break-even point, revenue equals cost;

3,200 n=1,280 n+1,000,000

3,200 n-1,280 n=1,000,000

1,920 n=1,000,000

n=1,000,000/1,920

n=520.83

n=521

Number of units is approximately 521 at break-even

Break-even level of units=521 units

e.

Break-even sales=price per unit×break-even level of units

where;

price per unit=$3,200

break-even level of units=521 units

replacing;

Break-even level of sales=3,200×521=$1,667,200

You might be interested in
An office building has $66,000 of net income and sold for $550,000. What was the rate of return? 12% 8.3% 10% 11.1%
spayn [35]

Answer:

8,3

Explanation:

its less then 10%

5 0
3 years ago
Read 2 more answers
What are factors of production?
Reika [66]
C: all the physical tools and equipment used in the production process. That would be the answer
4 0
3 years ago
Julie has just retired. Her company's retirement program has two options as to how retirement benefits can be received. Under th
olchik [2.2K]

Answer:

First option will be recommended.

Explanation:

To determine which option to be taken, we calculate the net present value each option generates. The option generating higher NPV should be recommended.

- Net present value of first option = Lump sum receipt = $150,000.

- Net present value of second option will be found by discounting cash flows at investing rate 12% and calculated as followed:

 +  Present value of 20 equal annual payment of $14,000 + Present value of $60,000 paid in 20 years = (14,000/12%) x [ 1 - 1.12^(-20)] + 60,000/1.12^20 = $110,792.

As net present value of the first option is higher than the second option, first option will be recommended.

8 0
3 years ago
An invoice, with payment terms of 6/10, n/30, was issued on april 28 for $230.00. if the payment was made on may 12, the amount
meriva

The amount of the payment on May 12 will be the full amount of $230.00

6/10 n/30 means a 6% discount <em>if </em>paid within 10 days and the net amount is due within 30 days. Since the payment was made after 10 days there would be no discount, just the full amount due.

6 0
3 years ago
Revenues are recognized when ______, even when the cash is collected in a different accounting period than the obligation to the
Elanso [62]

The condition for which revenues are recognized even when the cash is collected in a different accounting period is;

  • Services are provided even if cash has not yet been collected, in cases of accrual basis accounting

<h3>Revenue recognition</h3>

Two major forms of revenue recognition exist;

  • When Cash is collected from customers. This is the case when the organisation uses cash basis accounting
  • When services are provided even if cash has not yet been collected. This is the case when the organisation used accrual basis accounting

Read more on revenue recognition;

brainly.com/question/26274038

6 0
2 years ago
Other questions:
  • ​if an employee feels she is underpaid for the effort she exerts, she will probably:
    10·1 answer
  • Workplace Messaging and Texting
    13·1 answer
  • Given that resources are scarce, Multiple Choice 1. A "free lunch" is possible, but only for a limited number of people. 2. Oppo
    12·1 answer
  • Richard is collecting estimates for a house that he will have the funding to build in 12 months. Which of the following factors
    10·1 answer
  • Ayayai Corp. had the following transactions during 2017: 1. Issued $235000 of par value common stock for cash. 2. Recorded and p
    5·1 answer
  • The field of _______ is considered a subfield of behavioral medicine and focuses on the various mental factors that are importan
    11·1 answer
  • Financing cash flows in the statement of cash flows would include which of the following?
    10·1 answer
  • Data concerning Hinkson Corporation's single product appear below: Per Unit Percent of Sales Selling price $ 140 100 % Variable
    5·2 answers
  • Helppppp correctly answer get a Brainliest.
    10·2 answers
  • retail marketing strategy is based, in part, on which characteristic unique to the retail environment? multiple choice increase
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!