What level of sales would be the cash break-even level

Assignment Help Finance Basics
Reference no: EM13299837

The manufacturer of a product that has a variable cost of $2.50 per unit and total fixed cost of $125,000 wants to determine the level of output necessary to avoid losses.

a.) What level of sales is necessary to break even if the product is sold for $4.25? What will be the manufacturer's profit or loss on the sales of 100,000 units? b.) If fixed costs rise to $175,000, what is the new level of sales necessary to break even? c.) If variable costs decline to $2.25 per unit, what is the new level of sales necessary to break even? d.) If fixed costs were to increase to $175,000 while variable costs declined to $2.25 per unit, what is the new break-even level of sales? e.) If a major proportion of fixed costs were noncash (depreciation), would failure to achieve the break-even level of sales imply that the firm cannot pay its current obligations as they come due? Suppose $100,000 of the above fixed costs of $125,000 were depreciation expense. What level of sales would be the cash break-even level of sales?

 

Reference no: EM13299837

Questions Cloud

Determine the chemical oxygen demand cod of a mixture : Determine the chemical oxygen demand (COD) of a mixture of 250 mg/l glutamic acid (C5H10N2O3) and 200 mg/l of glucose(C6H12O6).
Find out the concentration in moles per liter : Determine the concentration, in moles per liter, to which the hydroxide concentration must be raised to produce a concentration of 0.200 mg/L of copper if the starting concentration is 2.00 mg/L. Estimate the resultant pH.
What are the costs of retained earnings and new common stock : Sun Instruments expects to issue new stock at $34 a share with estimated flotation costs of 7% of the market price. The company currently pays a $2.10 cash dividend and has a 6% growth rate. What are the costs of retained earnings and new common s..
Determine the power output of the speaker : At a recent rock concert, a dB meter registered 130 dB when placed 1.50 m in front of a loudspeaker on the stage. What was the power output of the speaker
What level of sales would be the cash break-even level : The manufacturer of a product that has a variable cost of $2.50 per unit and total fixed cost of $125,000 wants to determine the level of output necessary to avoid losses.
What made the music of the beatles : What were the main elements in America and England that led up to the British invasion? What was the mood of America like in late 1963 and early 1964? What made the music of The Beatles and other British invasion groups different from the music being..
Evaluate the molar concentration of hcl in a solution : Calculate the molar concentration of HCl in a solution that has a specific gravity 1.185 and is 36.5% (w/w). Prepare from this bottle 1 L of 0.1 HCl solution.
Find how many meters is the cliff above the ground below : A ball is released from the top of a cliff; it hits the ground 1.1 seconds later. how many meters is the cliff above the ground below
How to use design chart for r for grade 60 reinforcement : Select the number and size of reinforcing bars required to resist a total factored moment of 180 ft. kips for a rectangular section with b = 12 in., d = 19.5 in., h = 24 in., f'c = 4 ksi, and fy = 60 ksi.

Reviews

Write a Review

 

Finance Basics Questions & Answers

  What arbitrage opportunity do these figures present

Suppose that 3-month interest rates (annualized) in Japan and the United States are 7% and 9%, respectively. if the spot rate is ¥142:$1 and the 90-day forward rate is ¥139:$1.

  Find how many physical units are accounted

In Davis Company, there are 2,000 units in beginning work in process, 11,000 units started into production, and 1000 units in ending work in process 55 percent complete.

  What is the cost of debt to dmi

The par value of the bond is $100, and the bond will mature in thirty years. What is the cost of debt to DMI if the bonds raise the following amounts (ignoring issuing cost)?

  What is the expected value of the total sales projected

Manufacturing Corp. expects to sell the following number of prefabricated buildings. The probability of each state is indicated. What is the expected value of the total sales projected?

  What is the company cost of capital

If the Treasury bill rate (Rf) is 5%, what is the company's cost of capital?

  Which system should be chosen

Whichever one is chosen will be renewed indefinitely at the same cost and same OCF. Using a required return of 15%, which system should be chosen? (Show the numbers used to derive the answer.)

  What is the value of a put option written on the stock

What is the value of a put option written on the stock with the same exercise price and expiration date as the call option? Round your answer to the nearest cent.

  Maturity of hedging instrument

The two basic types of hedges involving futures market are long hedges and short hedges, where the words "long" and "short" refer to maturity of hedging instrument.

  What amount must she deposit annually to be able to make

If she starts making these deposits on her 33th birthday and continues to make deposits until she is 65 (the last deposit will be on her 65th birthday), what amount must she deposit annually to be able to make the desired withdrawals at retirement..

  How large a sales increase can the company achieve

How large a sales increase can the company achieve without having to raise funds externally; that is, what is its self-supporting growth rate.

  Compute the price in us dollars

Chamberlain Canadian Imports has agreed to buy 15,000 cases of Canadian beer for four million Canadian dollars at today's spot rate. The firm's financial manager, James Churchill, has noted the following current spot and forward rates:

  National newsmagazine publishes

National newsmagazine publishes the article on efforts to limiting smoking in public places.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd