Elise and her friend Eloi developed an online car repair training course and sell it for $67.50 per course. The contribution margin per course is $23.00 and to break-even they need to have a total revenue of $32,000.00 per annum. a. What is the break-even volume? Round up to the next whole number b. What is the fixed costs per annum? Round to the nearest cent c. What is the total revenue if they sell 3,050 courses this year?

Elise and her friend Eloi developed an online car repair training course and sell it for $67.50 per course. The contribution margin per course is $23.00 and to break-even they need to have a total revenue of $32,000.00 per annum. a. What is the break-even volume? Round up to the next whole number b. What is the fixed costs per annum? Round to the nearest cent c. What is the total revenue if they sell 3,050 courses this year?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 6PB: Karens Quilts is considering the purchase of a new Long-arm Quilt Machine that will cost $17,500 and...

See similar textbooks

Similar questions

Planck, the new owner of the vehicle accessory shop, is considering buying sets of winter tyres for $ 299 per set and selling each set at $ 520. Fixed costs related to this operation amount to $ 3250 per month. It is expected that 18 sets per month could be sold. How much profit will Planck make each month? Round to the nearest one. Hint: use the contribution margin approach.
Plank, the new owner of the vehicle accessory shop, is considering buying sets of winter tyres for $ 299 per set and selling them at $ 520 each. Fixed costs related to this operation amount to $ 3250 per month. It is expected that 18 sets per month could be sold. How much profit will Plank make each month? Hint: use the contribution margin approach.
Karens Quilts is considering the purchase of a new Long-arm Quilt Machine that will cost $17,500 and will increase her fixed costs by $119. What would happen if she purchased the new quilt machine to realize the variable cost savings of $5.00 per quilt, and what would happen if she raised her price by just $5.00? She feels confident that such a small price increase will not decrease the sales in units that will help her offset the increase in fixed costs. Given the following current prices how would the break-even in units and dollars change? Complete the monthly contribution margin income statement for each of these cases.
1. ABC Taxi has an average fixed cost of $8,000 a year for each car. Each mile driven has variable cost $.40 and collect fares of $.60. How many miles a year does each car have to travel before making profit? a. ABC company is contemplating adding a new line of product, which will require leasing new equipment for a monthly payment of $12,000. Variable costs would be $15.00 per product, and selling price per product is $40. What would be profit or loss if business sell 600 of these products? b. If 800 quantity of products can be sold, and a profit target is $10,000, what price should be charged for each product?
Knarly Knife Kompany is thinking about launching a new kitchen knife set. Relevant fixed costs for this launch would be $1.3 million. The knife sets would sell for $55 each, earning a contribution margin of $22.93 per set. Suppose Knarly introduces the new knife set and sells exactly 45,600 knife sets. What would be Knarly's profit or loss on the launch, in dollars? (If it is a loss, be sure to include a negative sign. Rounding: whole dollar.) Answer is: -254,392, but HOW is that the answer? Please explain.
ABC Taxi has an average fixed cost of $8,000 a year for each car. Each mile driven has variable cost $.40 and collect fares of $.60. How many miles a year does each car have to travel before making profit?
Night Shades Inc. (NSI) manufactures biotech sunglasses. These sunglasses sell for $150 each, and cost $70 each to produce. Night Shades Inc. has fixed costs of $100,000. Calculate Night Shades’ Breakeven point. how much profit (loss) will Night Shades have if it sells 500 sunglasses? 4,000 sunglasses? Night Shades’ manager expects an operating profit of $200,000. How many sunglasses must be sold to attain this profit?
Required: 1. Complete the following table. 2. Suppose Sandy Bank sells its canoes for $590 each. Calculate the contribution margin per canoe and the contribution margin ratio. 3. This year Sandy Bank expects to sell 760 canoes for $590 each. Prepare a contribution margin income statement for the company. 4. Calculate Sandy Bank's break-even point in units and in sales dollars. Sandy Bank sells its canoes for $590 each. 5. Suppose Sandy Bank wants to earn $76,000 profit this year. Calculate the number of canoes that must be sold to achieve this target. Sandy Bank sells its canoes for $590 each. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the following table. Note: Round your "Cost per Unit" answers to 2 decimal places. Number of Canoes Produced and Sold Total costs Variable Costs Fixed Costs Total Costs Cost per Unit Required 3 Required 4 Variable Cost per Unit Fixed Cost per Unit Total Cost per Unit $ $ $ 500 Required 5 780 0 0.00
1. A recently retired professor, Melinda Marketing, plans to establish the Hot-Air FanCompany and manufacture circulating fans. She estimates the fixed cost of operations tobe $357,500 annually. The variable cost of producing the fans is forecasted to be $85 perunit.a. How many fans must be sold to break even if the fans are priced at $150?b. If Hot-Air sells 6,000 fans, what will be the EBIT?c. If Hot-Air sells 6,000 fans and has interest expense of $8,125, what is Hot-Air’stimes-interest-earned? Hot-Air does not have any nonoperating expenses.d. If the fans are priced at $150, what is Hot-Air’s breakeven sales? 2. Vapor Lock Motors’ EBIT is $7,000,000, the company’s interest expense is $2,000,000, and its tax rate is 40 percent. Vapor Lock’s beta is 1.5. a. What is Vapor Lock’s DFL? b. If Vapor Lock were able to grow its EBIT by 50%, what would be the percentage increase in net income? c. If Vapor Lock were able to grow its EBIT by 50%, what would be the resulting net income? 3. A…
A recently retired professor, Melinda Marketing, plans to establish the Hot-Air FanCompany and manufacture circulating fans. She estimates the fixed cost of operations tobe $357,500 annually. The variable cost of producing the fans is forecasted to be $85 perunit.a. How many fans must be sold to break even if the fans are priced at $150?b. If Hot-Air sells 6,000 fans, what will be the EBIT?c. If Hot-Air sells 6,000 fans and has interest expense of $8,125, what is Hot-Air’stimes-interest-earned? Hot-Air does not have any nonoperating expenses.d. If the fans are priced at $150, what is Hot-Air’s breakeven sales?
Night Shades Inc. (NSI) manufactures biotech sunglasses. These sunglasses sell for $150 each, and cost $70 each to produce. Night Shades Inc. has fixed costs of $100,000. a. Calculate Night Shades’ Breakeven point. b. how much profit (loss) will Night Shades have if it sells 500 sunglasses? 4,000 sunglasses? c. Night Shades’ manager expects an operating profit of $200,000. How many sunglasses must be sold to attain this profit?
Russ has developed a new device, which he hopes to produce and market on a large scale. Russ will rent a production space for P500 per month and rent production equipment for P800 per month. Russ estimates the material cost per unit will be P5 and the labour cost per unit, P3. Advertising and promotion will cost P900 per month. He will hire workers and spend his time promoting the product. Advertising and promotion is a? a. Variable product cost b. fixed product costc. fixed period costd. variable period cost