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
miv72 [106K]
3 years ago
15

An electronics firm is currently manufacturing an item that has a variable cost of $ 0.50 per unit and a selling price of $ 1.00

per unit. Fixed costs are $ 14,000. The current volume is 30 comma 000 units. The firm can substantially improve product quality by adding a new piece of equipment at an additional fixed cost of $ 6,000. The variable cost would increase to $ 0.60​, but volume should jump to 50,000 units due to a​ higher-quality product.
Based on the given information, the decision should be to:
a. For Smithson Cutting, the break-even point in units?
b. For Smithson Cutting, the break-even point in dollars =?
Business
1 answer:
Paladinen [302]3 years ago
6 0

Answer:

a) the break-even point in unit= 50, 000 units

b.) the break-even point in dollars = $50,000

Explanation:

The break even point in units is the minimum units of the product that the company should sell in order for it to make no profit or loss.  

At this units of sales, the sales revenue would produce a total contribution exactly equal to the fixed cost.

Break -even point in unit = General fixed cost/price  - variable cost

= 14,000 + 6000/(1-0.6)= 50,000  units

Break -even point (sales revenue) =General fixed cost/contribution sales ratio

Contribution sales ratio-= 1-0.6/1× 100= 40%

Break-even sales revenue= 14,000 + 6000/40%=$50,000

a) For Smithson Cutting, the break-even point in unit= 50, 000 units

b) For Smithson Cutting, the break-even point in dollars = $50,000

Profit before decision

Profit = (sales price - variable cost)× units - Fixed cost

= (1-0.5)×30000 - 14,000 = $1000

Profit after = 1- 0.60× 50,000 - 20,000= $0

You might be interested in
Sensitivity analysis determines the: Multiple Choice net present value range that can be realized from a proposed project. degre
BaLLatris [955]

Answer:

It determines the degree to which the net present value reacts to changes in a single variable

Explanation:

Sensitivity Analysis is a tool which is used in financial modeling to analyze how the net values of a set of independent variables affect a single dependent variable under certain specific conditions.

It shows how different values of the independent variable causes changes in the single dependent variable. It predicts the result of a decision given a certain range of variables.

3 0
3 years ago
Suppose an oligopolistic producer assumes its rivals will ignore a price increase but match a price cut. In this case the firm p
andreyandreev [35.5K]

Answer: C) demand curve as kinked, being steeper below the going price than above.

Explanation:

For an oligopolistic producer, who assumes that its rival would ignore a price increase but match a price cut, the perception of the firm about it demand curve is that it would be kinked, being steeper below the going price than above.

6 0
4 years ago
The government regulates financial markets for two main reasons:
mart [117]

B. to improve control of monetary policy and to increase the information available to investors

C. To ensure that financial intermediaries do not earn more than the normal rate of return and to improve control of monetary policy

Hope this helped ;)

8 0
3 years ago
A company that uses an in-house advertising department might turn its advertising and promotion tasks over to an outside agency
Tema [17]

Explanation:

think the answer is E all of the Above

8 0
3 years ago
The following selected transactions were completed by Fasteners Inc. Co., a supplier of buttons and zippers for clothing:
Lera25 [3.4K]

<u>Solution and Explanation:</u>

The following journal entries will be passed in the book sof fasteners Inc., Co., which is a supplier of buttons and zippers for clothing

Date        Accounts Titles and Explanation  Post Ref    Debit  Credit

1 Nov-21  Notes receivable                                      $ 72,000  

      Accounts receivable-McKenna Outer Wear Co.        $ 72,000

2  Dec-31  Interest receivable (72000 * 9 \% * 40 / 360)    $720  

 Interest revenue                                                     $ 320

3  Jan-20  Cash                                           $ 73080  

 Interest revenue (72000 * 9 \% * 20 / 360)         $360

 Interest receivable                                          $720

 Notes receivable                                               $72,000

Note: the figures have been calculated and rounded off in the nearest dollar amount.

4 0
3 years ago
Other questions:
  • Scenario 13-1 Korie wants to start her own business making custom furniture. She can purchase a factory that costs $400,000. Kor
    7·1 answer
  • In 2008, OPEC succeeds in raising world oil prices by 300 percent. This price increase causes inventors to look at alternative s
    9·1 answer
  • The law of comparative advantage indicates thata. specialization and exchange will permit trading partners to maximize their joi
    5·1 answer
  • ________________analysis involves determining the appropriateness of training, given the company's business strategy, its resour
    9·1 answer
  • The primary purpose of the legal reserve requirement is toa. Prevent banks from hoarding too much vault cash.b. Provide a means
    13·1 answer
  • The plaintiff alleges that the defendant spread rumors and gossip about her and her business. From the start, the plaintiff appe
    15·1 answer
  • In January, 20XX a customer buys 100 shares of ABC stock at $50 per share and pays a $2 commission per share. The customer recei
    9·1 answer
  • A firm has a required return of 14.2% and a beta of 1.63. If the risk-free rate is currently 5.4%, what is the expected return t
    5·1 answer
  • Watermelon, Inc. provides the following data: 20X9 20X8 Cash $41,000 $25,000 Accounts Receivable, Net 102,000 62,000 Merchandise
    11·1 answer
  • Skinner Baking Company is ready to launch a coffeecake line under the Skinner Baking 108 label. Which condition for favorable br
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!