The Breakeven point in Dollars is $25,000
Breakeven point in Dollars is computed as;
= Fixed cost / Contribution margin ratio
First, we need to compute the contribution margin ratio
= Contribution margin / Revenues
= $22,500 / $37,500
= 0.6%
Then,
Breakeven point in Dollars
= Fixed cost / Contribution margin ratio
= $15,000 / 0.6%
= $25,000
Therefore, Company Z Breakeven Point in Dollars is $25,000
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Answer:
Explanation:
Based on the information that has been given in the question, the following answer can be provided
a. Determine the amount of Pepper's deficiency.
First, we need to calculate the loss that was recognized. This will be:
= ($13,000 + $49,000) - $24,000
= $62,000 - $24,000
= $38,000
Pepper's share of the loss will then be:
= $38,000/2
= $19,000
Pepper's deficiency will now be his contribution minus the loss incurred. This will be:
= $19,000 - $13,000
= $6,000
Deficiency of $6000
b. Determine the amount distributed to Reynell, assuming Pepper is unable to satisfy the deficiency.
This will be:
= $49,000 - $19000 - $6,000
= $49,000 - $25,000
= $24,000
Using High-Low method:x 1 = 1,125 ( low units ), x 2 = 3,000 ( high units )y 1 = 38,000 ( low cost ), y 2 = 59,000 ( high cost ).Formula is: y = m x + b, where b represents Fixed costs. m = ( y2 - y1 ) / ( x2 - x1 ) = ( 59,000 - 36,000 ) / ( 3,000 - 1,125 ) = 11.259,000 = 11.2 * 3,000 + bb = 59,000 - 33,600 = 25,400y = 11.5 x + 25,400Answer: Total fixed costs are $25,400.