Assume that the Unit Price on Firm X\'s product is $ 20 Per Unit. The Unit Varia
ID: 2424373 • Letter: A
Question
Assume that the Unit Price on Firm X's product is $ 20 Per Unit. The Unit Variable Cost is $ 10 Per Unit, and the Fixed Cost equals $ 50,000. Based upon this scenario: a. Determine the B/E Point in number of units b. Determine the B/E Point in Sales Dollars c. Determine the B/E Point in Sales Dollars via another computation vs. the one you used in Part b. d. Confirm your answers in a - c above by presenting a Managerial Income Statement e. Determine the # of units which must be sold to generate a $ 50,000 Operating Profit f. Determine the Sales Dollars that must be generated to achieve the $ 50,000 Operating Profit g. Via another computation vs. the one used in Part f, determine the Sales Dollars required to meet the $ 50,000 Operating Profit h. Confirm your answers in e - g above by presenting a Managerial Income Statement i. Determine the Average Total Cost (ATC), Average Variable Cost (AVC), and Average Fixed Cost (AFC) for the B/E Point. j Determine the ATC, AVC, and AFC for the # of units computed in Part e. k. Determine the Marginal Cost Per Unit for between the B/E Point and the # of units computed in Part e. can we please try this problem one more time
Explanation / Answer
Fir X Details Per unit $ Total Amt $ Unit selling Price 20.00 Unit Variable cost 10.00 1.00 Unit Contribution margin 10.00 2.00 CM ratio= 50% 3.00 Total Fixed cost 50,000.00 a BEP in units =3/1= 5,000.00 nos b Break even in $ sales=5000*20= 100,000.00 c BE sales $ =Fixed cost/CM ratio= 100,000.00 d Firm X Contribution margin Income statement Details Per unit $ Total Amt $ Units sold 5,000.00 Sales revenue 20.00 100,000.00 Variable cost 10.00 50,000.00 Contribution Margin 10.00 50,000.00 Fixed costs 50,000.00 Net Operating Income - e Required operating Income 50,000.00 Fixed cost 50,000.00 4.00 Total contribution required 100,000.00 BEP in units =4/1= 10,000.00 nos f Sales $ for the $50000 operating profit=10000*20= 200,000.00 g Sales $ for the $50000 operating profit=100000/CM ratio= 200,000.00 h Firm X Contribution margin Income statement Details Per unit $ Total Amt $ Units sold 10,000.00 Sales revenue 20.00 200,000 Variable cost 10.00 100,000 Contribution Margin 10.00 100,000 Fixed costs 50,000.00 Net Operating Income 50,000.00 ATC AVC AFC At BEP 20.00 10.00 10.00 At $50000 operating profit level 15.00 10.00 5.00 k Marginal cost of production between a & e= $10 per unit