### Cost structure-what is the breakeven point in units

Assignment Help Financial Management
##### Reference no: EM131023188

White machine shop fabricates polished steel casings. They currently sell 20,000 casings at a selling price of \$45. They have the following cost structure: Variable costs per unit \$30 Fixed costs \$150,000 Required (each requirement is independent): a. What is the breakeven point in units? Break-even point in units: b. Suppose that if they decrease their price to \$38, they could increase sales to 30,000 units. What would the new profit be if they decrease their price to \$38? Profit if price is \$38: c. What is the minimum price that White would be willing to charge in order to achieve an increase in sales to 30,000 units (round to the nearest cent)? Minimum price for increase to 30,000 units: d. Suppose that White can purchase a machine that would increase fixed costs to \$300,000 and decrease unit variable costs to \$20 per unit. At what level of production and sales would White be indifferent between the old machine and the new machine? Level of production and sales (in units):

### Previous Q& A

#### Write a one page reaction paper about the given video

Write a 1 page reaction paper about the following video. The Century Of The Self (2002): Happiness Machines (Ep. 1of4)_agk - https://vimeo.com/143890324

#### Profitability of new investment in plant and equipment

Suppose that the economy is currently in a recession but economic forecasts indicate that the economy will soon enter an expansion. What is the likely effect of the expansion on the expected profitability of new investment in plant and equipment?

#### How motor carriers are creating unnecessary costs

How Motor Carriers are creating unnecessary costs to the firms that is directly correlated with safety - Topic is the safety of Motor Carriers on the road that directly affect financial costs

#### What are two symbolic techniques to solve linear equation

What are two symbolic techniques used to solve linear equations? Which do you feel is better?

#### What is current share price-dividends are expected to grow

Synovec Co. is growing quickly. Dividends are expected to grow at a rate of 24 percent for the next three years, with the growth rate falling off to a constant 6 percent thereafter. If the required return is 14 percent, and the company just paid a di..

#### Find the final amount when deposited

Find the final amount when \$1500 is deposited at the end of each quarter at 7.4% compounded quarterly for 15 years then \$1000 is deposited at the end of each quarter at 4.3% compounded quarterly for 10 years

#### What are the odds of it beings heads and tails

If I flip a coin 1,000,000 times, what are the odds of it beings heads AND tails 500,000 times?

#### What is your total dollar return on this investment

Four months ago, you purchased 1,200 shares of LBM stock for \$9.30 a share. Last month you received a dividend payment of \$.065 a share. Today, you sold the shares for \$8.62 a share. What is your total dollar return on this investment?

#### What is the maximum initial cost of company

Och, Inc., is considering a project that will result in initial aftertax cash savings of \$1.77 million at the end of the first year, and these savings will grow at a rate of 1 percent per year indefinitely.What is the maximum initial cost of company ..

#### Explore the relationship between humanity and the divine

Explore the relationship between humanity and the divine - Compare and contrast how one of these topics is developed in The Odyssey and Dantes Inferno.

### Similar Q& A

#### Face value bond at par that pays interest annually

You buy a \$1,000 face value bond at par that pays interest annually. It yields 10% per annum. As is the usual case, the bond’s issuer waits until just when it is due to pay interest and files for bankruptcy. What is your total dollar return? What is ..

#### What is marginal tax rate and average tax rate

New Hope Managed Care Inc., is a for-profit managed care company that serves the southwest United States. Last year, it reported \$1,200,000 in income from operations, \$250,000 in interest income from bonds it bought in the previous year, and \$60,000 ..

#### Market be assuming about the growth in dividends

If a stock is selling for 200 in the stock market, what might the market be assuming about the growth in dividends when the dividend at time t =1 is expected to be 4.25 per share and r is 5%?

#### Bond makes annual coupon payments

Company just issued a 10 year 7% coupon bond. The face value of the bond is \$1,000 and the bond makes annual coupon payments. If the required return on the bond is 10%, what is the bond’s price?

#### Annual coupon rate paid semi annually

A few years ago Spider Web INC issued bonds with a 8.23 percent annual coupon rate paid semi annually. The bonds have a par value of \$1000 a current price of \$1092 and will mature in 20 years. What would the annual yield to maturity be on the bond if..

#### Effective annual interest rate-funds actually borrowed

In exchange for a \$460 million fixed commitment line of credit, your firm has agreed to do the following: Pay 3.0 percent per quarter on any funds actually borrowed. Ignoring the commitment fee, what is the effective annual interest rate on this line..

#### Compute the yield to maturity

A 1,000 par value 7% annual coupon bond with 10 years to maturity is currently selling for 700. Compute the yield to maturity.

#### Corporate taxes capital structure theory

Consider a world where the M&M Corporate Taxes Capital Structure theory is true, then answer the following question. An all-equity firm currently has a market value of \$622.09. The firm decides to issue debt in order to repurchases \$126.48 in equity...

#### Perpetual inventory system and the periodic inventory system

What are the major differences between the perpetual inventory system and the periodic inventory system? What are special considerations for each when doing adjusting and closing entries?

#### Depreciation change-firm net income-free cash flow to change

Last year, Stewart-Stern Inc. reported \$11,250 of sales, \$4,500 of operating costs other than depreciation, and \$1,250 of depreciation. The company had \$3,500 of bonds outstanding that carry a 6.5% interest rate, and its federal-plus-state income tax..

#### What is the current price of this zero coupon bond

A 30-year bond is maturing in 5 years. The par value is \$1000. The coupon rate is 6%. Coupon payment is made semi-annually. The price of this bond is \$950. a) What is the yield to maturity? b) A new-issued 5-year zero coupon bond has the same yield s..

#### Example of market value-weighted index

Dow Jones 30 Industrial Average is an example of Market value-weighted index. Financial statements of a large corporation prepared using US GAAP and IFRS may have some difference but the P/E ratio will be same under GAAP and IFRS.