Business, 18.04.2020 22:48 3300

Millstone Company produces only one product. Normal capacity is 20,000 units per year, and the unit sales price is $5. Relevant costs are: (picture attached)

Compute the following:

(1) The break-even point in units of product

(2) The break-even point in dollars of sales

(3) The number of units of product that must be produced and sold to achieve a profit of $10,000

(4) The sales revenue required to achieve a profit of $10,000

Millstone Company produces only one product. Normal capacity is 20,000 units per year, and the unit

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Answer from: lolabizzer

The break-even point (in units) of product is 13,000 units.The break-even point (in dollars) of sales is $65,000.The number of units of product that must be produced is 18,000 units.The sales revenue required to achieve the profit is $90,000.

Calculation of break-even point in units of product

Fixed Cost = Factory Overhead + Marketing Expenses + Administrative Expenses

Fixed Cost = $15,000 + $5,000 + $6,000

Fixed Cost = $26,000

Selling Price = $5.00

Variable Cost = Materials + Direct Labor + Factory Overhead + Marketing Expense

Variable Cost = $1.00 + $1.20 + $0.50 + $0.30

Variable Cost = $3.00

Contribution Margin Per unit = Selling Price per unit - Variable Cost per unit

Contribution Margin Per unit = $5 - $3

Contribution Margin Per unit = $2

Break-even point (in units) = Fixed Cost / Contribution Margin Per unit

Break-even point (in units) = $26,000 / $2

Break-even point (in units) = 13,000 units

Calculation of the break-even point in dollars of sales

Contribution Margin Ratio = Contribution Margin / Sales

Contribution Margin Ratio = $2 / $5

Contribution Margin Ratio = 0.40

Break-even point (in dollars) = Fixed Cost / Contribution Margin Ratio

Break-even point (in dollars) = $26,000 / 0.40

Break-even point (in dollars) = $65,000

Calculation of number of units of product that must be produced and sold to achieve the profit

Net Income = $10,000

Fixed Cost = $26,000

Net Income = Revenue - Variable Cost - Fixed Cost

Let x = Number of Units

$10,000 = $5x - $3x - $26,000

$2x = $10,000 + $26,000

x = $36,000 / $2

x = 18,000 units

Calculation of the sales revenue required to achieve the profit

Sales Revenue = Sales per unit x Number of units

Sales Revenue = $5 per unit x 18,000 unit

Sales Revenue = $90,000

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Answer from: jxgcyttigfccvn8087

(1) 13,000 units

(2) $65,000

(3) 18,000 units

(4) $90,000

Explanation:

(1) Break-even point (in units) = Fixed Cost / Contribution Margin Per unit

Fixed Cost = Factory Overhead + Marketing Expenses + Administrative Expenses

Fixed Cost = $15,000 + $5,000 + $6,000

Fixed Cost = $26,000

Selling Price = $5.00

Variable Cost = Materials + Direct Labor + Factory Overhead + Marketing Expense

Variable Cost = $1.00 + $1.20 + $0.50 + $0.30

Variable Cost = $3.00

Contribution Margin Per unit = Selling Price per unit - Variable Cost per unit

Contribution Margin Per unit = $5 - $3

Contribution Margin Per unit = $2

Break-even point (in units) = $26,000 / $2

Break-even point (in units) = 13,000 units

(2) Break-even point (in dollars) = Fixed Cost / Contribution Margin Ratio

Contribution Margin Ratio = Contribution Margin / Sales

Contribution Margin Ratio = $2 / $5

Contribution Margin Ratio = 0.40

Break-even point (in dollars) = $26,000 / 0.40

Break-even point (in dollars) = $65,000

(3) Net Income = Revenue - Variable Cost - Fixed Cost

Net Income = $10,000

Fixed Cost = $26,000

Let x = Number of Units

$10,000 = $5x - $3x - $26,000

Add $26,000 on both sides we get;

$2x = $10,000 + $26,000

x = $36,000 / $2

x = 18,000 units

(4) Sales Revenue = Sales per unit x Number of units

Sales Revenue = $5 per unit x 18,000 unit

Sales Revenue = $90,000

Answer from: Quest

all of them make sense but, i would have to say ask someone who has been there/or lives there, and/or read recent newspapers from that city.

hope this !

Answer from: Quest

1 all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

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