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Breakeven Analysis

Question # 00083650
Subject: Accounting
Due on: 08/21/2015
Posted On: 07/22/2015 12:53 AM

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Assignment 7:

Breakeven Analysis


Prepare breakeven analysis and a C-V-P analysis planning future sales using the information below.
Breakeven Analysis and Planning Future Sales
Write Company has a maximum capacity of 200,000 units per year. Variable manufacturing costs are $12 per unit. Fixed overhead is $600,000 per year. Variable selling and administrative costs are $5 per unit, and fixed selling and administrative costs are $300,000 per year. The current sales price is $23 per unit.
Required

1. What is the breakeven point in (a) sales units and (b) sales dollars?

2. How many units must Write Company sell to earn a profit of $240,000 per year?

3. A strike at one of the company's major suppliers has caused a shortage of materials, so the current year's production and sales are limited to 160,000 units. To partially offset the effect of the reduced sales on profit, management is planning to reduce fixed costs to $841,000. Variable cost per unit is the same as last year. The company has already sold 30,000 units at the regular selling price of $23 per unit.

o a. What amount of fixed costs was covered by the total contribution margin of the first 30,000 units sold?

o b. What contribution margin per unit will be needed on the remaining 130,000 units to cover the remaining fixed costs and to earn a profit of $210,000 this year?


Required references in APA style

Use excel sheet

Explain calculations as side tips

Tags analysis breakeven units costs sales year fixed unit analysis breakeven company selling planning variable profit 0 current contribution margin remaining price administrative sold earn future reduced offset management effect reduce regular cost

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Breakeven Analysis

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Posted On: 07/22/2015 12:53 AM
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Tutorial Preview …planning xxxxxx sales xxxxx the information xxxxx Breakeven Analysis xxx Planning xxxxxx xxxxxxxxxx Company xxx a maximum xxxxxxxx of 200,000 xxxxx per xxxx xxxxxxxx manufacturing xxxxx are $12 xxx unit Fixed xxxxxxxx is xxxxxxxx xxx year xxxxxxxx selling and xxxxxxxxxxxxxx costs are xx per xxxxx xxx…
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234676_169826_2_TM_C_References.docx (11.05 KB)
Preview: In Small xxxxxxxx Management (Fourth xx , p xxxx Houghton Mifflin xxxxxxx Kinney, x x &.....
234676_169826_1_TM_C_TTs251014-135144-10.xlsx (11.33 KB)
Preview: per xxxxxxxxxxxxxxx of xxxxx units for xxxxxxx profit of xxxxxxx per xxxxx xxxxxxx + xxxxxxx / 6Therefore, xxxxx Company must xxxx 190000 xxxxx xx achieve x desired profit xx $240000 per xxxxxxxx the xxxxx xx first xxxxx units at xxx regular selling xxxxx of xxx xxx unit xxx variable cost xxx unit being xxx same, xxx xxxxxxxxxxxx per xxxx will.....
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