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2 years ago

_____ is the method used to determine the number of units a firm must sell at a specific price to cover all costs.

Business

1 answer:

Aleksandr-060686 [28]2 years ago

3 0

Answer:

Breakeven analysis.

Explanation:

Breakeven analysis is the method used to determine the number of units a firm must sell at a specific price to cover all costs. It is a concept that allow business owners or financial experts to determine and know what they need to sell either on a monthly or annual (yearly) basis, in order to be able to cover the costs of doing the business.

Basically, it helps us to determine the amount of revenue required for the smooth operation of a business, amount of money needed to cover both fixed and variable costs. Using the breakeven analysis, production costs can be categorized as;

1. Variable costs: these are costs that usually change with respect to changes in the level of production or output. Examples are direct labor, maintenance of equipment or machines, raw materials costs etc.

2. Fixed costs: these are the costs which are not directly related to the level of production or not affected by the quantity of output in an organization. Examples are rent, depreciation, administrative cost, research and development costs, marketing costs etc.

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Answer:

When there is no change in the beginning and ending units of inventory i.e the units sold are equal to the units produced,the income under variable and absorption costing remains the same which is the condition in the given question.

Explanation:

If we have 80,000 units produced and sold then the income under both methods will be the same.

Manta Ray Company

Income Statement Variable Costing

Sales $40*80,000= $ 3200,000

Variable Costs $ 31*80,000= $ 2480,000

Contribution Margin $ 720,000

Less Fixed Costs $ $712,800

Gross Profit $ 7200

Manta Ray Company

Income Statement Absorption Costing

Sales $40*80,000= $ 3200,000

Variable Costs $ 31*80,000= $ 2480,000

Fixed Costs $ $712,800

Gross Profit $ 7200

If there is an increase in the inventory units ( ie. production is less than the Sales) the fixed manufacturing overhead cost is released from inventory and deducted from variable income.

Similarly when the inventory units decrease ( ie. production is more than the Sales) the fixed manufacturing overhead cost is deferred from inventory and added to variable income.

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2 years ago

Suppose that, in a competitive market without government regulations, the equilibrium price of milk is $2.50 per gallon. Complet

Darina [25.2K]

Answer and Explanation:

According to the scenario, computation of the given data are as follow:-

Price ceiling:-This is show the limit of the price on maximizing value of the product which is decided by government and his imposed group for customer.

Binding:-The binding price ceiling is below the equilibrium price.

Unbinding:-The unbinding price ceiling is above equilibrium price.

Price floor:-This is show the limit of the price on lower value of the product which is decided by government and his imposed group for customer. A price floor must be higher than the price equilibrium price in order to be effective.

Binding:-The binding price floor is above the equilibrium price.

Unbinding:-The unbinding price floor is below the equilibrium price.

It is given that the equilibrium price of milk is $2.50 per gallon.

Statement 1:-This is the example of price floor and binding because minimum price of $2.30 per gallon is decided.

Statement 2:-This is the example of price floor and binding because minimum price of $3.40 per gallon is decided for gasoline.

Statement 3:-This is the example of price floor and binding because teenagers are not hired due to minimum-wage laws.

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2 years ago

Mackenzie's dream is to open a chain of salons. She hopes to attract investors to help finance growth. Having once considered fo

CaHeK987 [17]

Answer: <em>Limited Liability Company</em>

Explanation:

Limited liability company also known as LLC is referred to as the United States specific type of private limited organization. It is referred to as a business structure or component that tends to combine or mix pass-through taxation for a sole proprietorship or a partnership with the tendency of a limited liability of an organization. A LLC is not an organization under the state law, it is referred to as a legal type of an organization that tends to provide a limited liability to the owners in several jurisdictions.

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3 years ago

A restaurant sells pizza at a rate of $13.57/slice. Expenses for the restaurant include raw material for pizza at $8.57 per slic

Sladkaya [172]

Answer:

The restaurant need to sell 46.6 slices (47 slices)

Explanation:

Giving the following information:

The restaurant sells pizza at a rate of $13.57/slice. Expenses for the restaurant include raw material for pizza at $8.57 per slice, $172.00 as monthly rental and $61.00 monthly as insurance.

To calculate the break-even point in units, we need to use the following formula:

Break-even point= fixed costs/ contribution margin

Break-even point= (172 + 61) / (13.57 - 8.57)

Break-even point= 46.6 slices

8 0

2 years ago