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NISA [10]
2 years ago
14

Mae Company sells its product for $12 per unit and has variable costs of $8 per unit. Total fixed costs are $60,000. Suppose var

iable costs increase by 10% due to an increase in the cost of direct materials. What will be the effect on the breakeven point in units
Business
1 answer:
alexdok [17]2 years ago
4 0

Answer:

Effect : Increase in Break Even units by 3,750 units to 18,750 units

Explanation:

Break even point is the level of activity at which a firm makes neither a profit nor a loss

Break even Point (Units) = Fixed Costs ÷ Contribution per unit

where,

Contribution per unit = Selling price per unit - Variable Costs per unit

                                    = $12 - $8

                                     = $4

Therefore,

<u>Before Increase</u>

Break even Point (Units) = $60,000 ÷ $4 = 15,000

<u>After Increase</u>

New Contribution = $12 - ($8× 1.10)

                              = $3.20

Therefore,

Break even Point (Units) = $60,000 ÷ $3.20 = 18,750

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Answer:

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Answer:

Note: The complete question is attached as picture below

Objectives                                         Most associated balanced scorecard

1. Percentage of repeat                    <em>Customer Perspective</em>

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4. Brand recognition                         <em>Customer Perspective</em>

5. Number of cross-trained              <em>Learning and Growth perspective</em>

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6. Amount of setup time                   <em>Internal process prospective</em>

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All of a company's depreciation, property taxes, and insurance premiums are considered manufacturing overhead.
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All of a company's depreciation, property taxes and insurance premiums are considered manufacturing overhead (MOH) ----- False.

What is considered manufacturing overhead?

Manufacturing overhead (MOH) cost is the sum of all the indirect costs which are incurred while manufacturing a product. It is added to the cost of the final product along with the direct material and direct labor costs.

What does manufacturing overhead include?

Manufacturing overhead includes indirect materials, indirect labor, depreciation on factory buildings and machines, and insurance, taxes, and maintenance on factory facilities. Costs that are a necessary and integral part of producing the finished product.

. Direct labor :

Is the cost of the workers who make the product. The cost of supervisory personnel, management, and factory maintenance workers, although they are needed to operate the factory, are classified as indirect labor because these workers do not use the direct materials to build the product.

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brainly.com/question/1055905

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Developing a new automobile requires the services of many types of experts such as design and electronics engineers, procurers,
sashaice [31]

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It could also mean an organization whose operation is not confined to a particular location or the confine of their office complex.

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