Winthrop manufacturing produces a product that sells for

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Reference no: EM13613707

1. Winthrop Manufacturing produces a product that sells for $50.00. Fixed costs are $260,000 and variable costs are $24.00 per unit. Winthrop can buy a new production machine that will increase fixed costs by $11,400 per year, but will decrease variable costs by $3.50 per unit. Compute break-even point in dollars with the purchase of the new machine.

A. $500,000

B.$440,678.

C.$521,923.

D.$480,000.

E. $460,000.

2. Dunkin Company manufactures and sells a single product that sells for $480 per unit; variable costs are $300. Annual fixed costs are $990,000. Current sales volume is $4,200,000. Compute the contribution margin ratio.

A.37.5%

B 62.5%.

C. 55.0%

D.. 50.0%.

E. 47.5%.

3. Winthrop Manufacturing produces a product that sells for $50.00. Fixed costs are $260,000 and variable costs are $24.00 per unit. Winthrop can buy a new production machine that will increase fixed costs by $11,400 per year, but will decrease variable costs by $3.50 per unit. Compute the contribution margin per unit if the machine is purchased.

A.$22.50

B.$26.00.

C. $29.50

D.$28.50

E..$27.50.

4. Winthrop Manufacturing produces a product that sells for $50.00. Fixed costs are $260,000 and variable costs are $24.00 per unit. Winthrop can buy a new production machine that will increase fixed costs by $11,400 per year, but will decrease variable costs by $3.50 per unit. Compute break-even point in units if the new machine is purchased.

A.10,438 units.

B.8,814 units.

C. 10,000 units.

D.9,200 units.

E. 9,869 units.

5. Winthrop Manufacturing produces a product that sells for $50.00. Fixed costs are $260,000 and variable costs are $24.00 per unit. Winthrop can buy a new production machine that will increase fixed costs by $11,400 per year, but will decrease variable costs by $3.50 per unit. What effect would the purchase of the new machine have on Winthrop's break-even point in units?

A.800 unit increase.

B800 unit decrease.

C. 5,714 unit increase.

D.4,444 unit decrease.

E. No effect on the break-even point in units.

Reference no: EM13613707

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