Question 2. Question:( TCO 4) Assume that we are manufacturing a product and assume that the sales price per unit is $ 80, the variable cost is $ 20 per unit, and the fixed cost is $ 90,000; a) how many units would we need to sell to break even? b) How many units would we need to sell to earn a profit of $ 120,000? c) How many units do we need to sell to double that profit to $ 240,000? D) Why didn ' t the number of units double from Part B to Part C?
Question 3. Question:( TCO 5) Sivan Co. manufactures and sells one product. For the year, they started with no opening inventory; produced 100,000 units, but only sold 70,000 units. The selling price per each unit is $ 60.
The variable costs per unit were: Direct materials......................... 7 Direct Labor............................. 6 Variable manufacturing overhead.... 5 Variable selling and administrative … 6 Fixed costs per year: Fixed manufacturing Overhead................$ 700,000 Fixed Selling and Administrative expenses.. $ 300,000
( a) Prepare the Income Statement using Absorption Costing.( b) Prepare the Income Statement using Variable Costing.
Question 4. Question:( TCO 6) At Long Co., electricity cost starts with a minimum fixed cost, and after that, there is a perfectly variable expense. Using estimated machine hours:
Machine hours |
Cost |
50,000 |
$ 102,000 |