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##### [solution] » 1. Blue Tree incurred a total cost of \$1,000 to produce 1500

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1. Blue Tree incurred a total cost of \$1,000 to produce 1500
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1. Blue Tree incurred a total cost of \$1,000 to produce 1500 units of output. A total of 250 hours

was incurred for this effort. If the variable cost was \$5 per direct labor hour, then the fixed cost

was how much?

2. Amazon is planning to expand its warehouse distribution center. Variable costs will increase

3% and fixed costs will increase 10%. Last year's costs are below.

Variable costs

\$25 per unit

Fixed costs

\$30,000 per month

Calculate the future total cost assuming 2,000 units are shipped each month.

3. If a company's sales price per unit is \$50, variable costs per unit are \$30, and fixed costs for the

year are \$300,000. How many units must the company sell to break even?

4. A company currently breaks even at 2,000 units. Its fixed costs are \$80,000 and its variable

costs are \$20 per unit. What is the product's selling price per unit?

5. A company's selling price is \$6 per unit, variable cost is \$1.50 per unit, and fixed costs are

\$12,000. What is the break-even point in sales dollars?

6 A company produces two products, A and B. A sells for \$10 and has variable costs of \$6. B sells

for \$8 and has variable costs of \$5. Fixed Costs for the period are \$25,000. An equal number of A

and B units are sold. At the break-even volume, how many units of A will be sold?

7. Crane Company produces one type of machine with the following costs and revenues for the

year

Total revenues

\$5,600,000

Total fixed costs

\$2,700,000

Total variable costs

\$1,400,000

Total units produced and sold 700,000

a. Refer to the Crane Company. Calculate the contribution margin per unit.

b. Refer to the Crane Company. Calculate the break-even point in units.

c. Refer to the Crane Company; how many units must be sold to make an operating profit of

\$300,000 for the year? 8. Charleston Company produces two products, A and B, with the following characteristics:

Product A Product B

Selling price per unit

\$12

\$18

Variable cost per unit

\$8

\$15

Expected sales (units) 15,000

20,000

Total fixed costs for the company are \$30,000.

Show you work for the following questions:

A. What is the anticipated profit given the expected sales volume?

B. Assuming the product mix would be the same at the break-even point, compute the breakeven point (be sure to indicate the number of units of each product

C. If only product C were sold, how many units would be needed to break even?

D. If only product F were sold, how many units would be needed to break even?

E. If the product mix changed so that equal units of C and F were sold, what would be the new

break-even point in total units?

9. Kodak wishes to earn a 30% return on its \$200,000 investment in equipment used to produce

new photography rolls. Based on estimated sales of 20,000 units of photography rolls, the cost

per unit would be as follows:

Variable manufacturing costs

\$8

Fixed selling and administrative costs \$4

Fixed manufacturing costs

\$2

At how much per unit should the Photography Rolls be priced for sale? (Kindly show the work)

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This question was answered on: Feb 21, 2020

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