sano In a slow year, Deutsche Burgers will produce 4.0 million hamburgers at a total cost of $5.5 million. In a good year, it can produce 8.0million hamburgers at a total cost of $6.8 million.a. What are the fixed costs of hamburger production? (Enter your answer in millions rounded to 1 decimal place. Do not roundintermediate calculations.)b. What are the variable costs when the firm produces 4.0 million hamburgers? (Enter your answer in millions rounded to 1 decimalplace. Do not round intermediate calculations.)c. What is the average cost per burger when the firm produces 2.00 million hamburgers? (Round your answer to 2 decimal places.Do not round intermediate calculations.)d. What is the average cost when the firm produces 4.0 million hamburgers? (Round your answer to 2 decimal places. Do not roundintermediate calculations.)a.Fixed costb. Variable costc. Average cost per burgerd. Average cost per burger$$$$4.2 million1.3 million2.431.38

The total costs incurred for the production are classified as fixed and variable costs. The high-low…

Answered: In a slow year, Deutsche Burgers will…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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In a slow year, Deutsche Burgers will produce 4 million hamburgers at a total cost of $4.8 million. In a good year, it can produce 5.2 million hamburgers at a total cost of $5.8 million. a. What are the fixed costs of hamburger production? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.) b. What is the variable cost per hamburger? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. What is the average cost per burger when the firm produces 3 million hamburgers? (Do not round intermediate calculations. Round your answer to 2 decimal places.) d. What is the average cost per burger when the firm produces 4 million hamburgers? (Do not round intermediate calculations. Round your answer to 2 decimal places.) e. Why is the average cost lower when more burgers are produced?
In a slow year, Deutsche Burgers will produce 3.2 million hamburgers at a total cost of $5.4 million. In a good year, it can produce 5.4 million hamburgers at a total cost of $6.1 million. What are the fixed costs of hamburger production? Note: Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places. What is the variable cost per hamburger? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. What is the average cost per burger when the firm produces 2 million hamburgers? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. What is the average cost per burger when the firm produces 3 million hamburgers? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Why is the average cost lower when more burgers are produced?
A mobile manufacturer company plans to produce 50000 mobiles this year. The company will sell for 150 OMR each. The fixed cost of the company 3 million and total variable costs are 5 million OMR. (a) Calculate the break-even point? (b) Suppose the company wanted to produce 100000 mobiles in the next year. How breakeven point will change.
Keep two decimals for all answers if needed. Assume a firm’s fixed cost is $1003, its product has a variable cost of $42, and a selling price of $87. What is the break-even point? How many units must be sold to make a total profit of $500?
The Weaver Watch Company sells watches for $25, the fixed costs are $140,000, and variable costs are $15 per watch.a. What is the firm’s gain or loss at sales of 8,000 watches? at 18,000 watches? b. What is the breakeven point? Illustrate by means of a chart.c. What would happen to the breakeven point if the selling price was raised to $31? What is the significance of this analysis?
1. An ice cream producer has fixed costs of $70,000 per month, and it can produce up to 15,000 ice cream tubs per month. Each tub costs $10 in the market while the producer faces variable costs of $3 per tub. (a) What is the economic breakeven level of production? (b) Calculate the ice cream producer's monthly profits at full capacity. What would happen to the monthly profits if another ice cream producer entered the market, driving the price of the ice cream tubs down to $7 per unit? Support your calculations graphically.
The manufacturer of a product that has a variable cost of $2.50 per unit and total fixed cost of $117,000 wants to determine the level of output necessary to avoid losses. What level of sales is necessary to break-even if the product is sold for $4.35? Round your answer to the nearest whole number. units What will be the manufacturer’s profit or loss on the sales of 104,000 units? Round your answer to the nearest dollar. $ If fixed costs rise to $164,000, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number. units If variable costs decline to $2.25 per unit, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number. units If fixed costs were to increase to $164,000, while variable costs declined to $2.25 per unit, what is the new break-even level of sales? Round your answer to the nearest whole number. units If a major proportion of fixed costs were noncash (depreciation), would…
[The following information applies to the questions displayed below.] Charlevoix Cases makes mobile phone cases. The company has collected the following price and cost characteristics: Sales price Variable costs Fixed costs $ 12.00 per case 5.50 per case 391,950 per year Assume that the company plans to sell 75,300 units annually. Consider requirements (b), (c), and (d) independently of each other. Required: a. What will be the operating profit? b. What is the impact on operating profit if the sales price decreases by 20 percent? Increases by 10 percent? Note: Do not round intermediate calculations. c. What is the impact on operating profit if variable costs per unit decrease by 20 percent? Increase by 10 percent? Note: Do not round intermediate calculations. d. Suppose that fixed costs for the year are 20 percent lower than projected and variable costs per unit are 20 percent higher tha projected. What impact will these cost changes have on operating profit for the year? Will profit…
The Chimes Clock Company sells a particular clock for $40. The variable costs are $23 per clock and the breakeven point is 230 clocks. The company expects to sell 280 clocks this year. If the company actually sells 430 clocks, what effect would the sale of additional 150 clocks have on operating income? Explain your answer. The sale of an additional 150 clocks would operating income by the amount of The total effect would amount to
In a slow year, Deutsche Burgers will produce 3.2 million hamburgers at a total cost of $4.6 million. In a good year, it can produce 6.2 million hamburgers at a total cost of $6.4 million. a. What are the fixed costs of hamburger production? (Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places.) b. What is the variable cost per hamburger? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. What is the average cost per burger when the firm produces 3 million hamburgers? (Do not round intermediate calculations. Round your answer to 2 decimal places.) d. What is the average cost per burger when the firm produces 4 million hamburgers? (Do not round intermediate calculations. Round your answer to 2 decimal places.) e. Why is the average cost lower when more burgers are produced? a. Fixed cost million b. Variable cost per burger per burger c. Average cost d. Average cost per burger e. Why is the average cost lower…
(Break-even point and selling price) Specialty Steel, Inc. will manufacture and sell 230,000 units next year. Fixed costs will total $320,000, and variable costs will be 50 percent of sales. a. The firm wants to achieve a level of earnings before interest and taxes of $270,000. What selling price per unit is necessary to achieve this result? b. Set up a pro forma income statement to verify your solution to part a. a. What selling price per unit is necessary to achieve a level of earnings before interest and taxes of $270,000? (Round to three decimal places.)
2. A new copier company plans to produce one model of copier. The copiers will sell for $820 each. The annual fixed costs of operation are $5,600,000 and the variable cost is $210 per unit. a. Assuming that they can sell everything they produce at this price, compute the breakeven quantity QBEP. b. If the company actually produces 11,000 copiers the first year, what will the profit/loss be? c. Include a fully-labeled breakeven chart illustrating the problem. 3. Fixed and variable cost for three potential facility locations are as shown below. Fixed cost Variable cost Location per year $240,000 $100,000 $150,000 per unit $15 $30 $20 a. Plot the total cost lines for these four locations on a single cost-volume graph. b. If expected output is to be 12,000 units per year, which location would provide the lowest cost? c. Identify the range of output over which each location alternative would be preferred (lowest cost). Compute the relevant crossover points, and clearly indicate your…

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