Kim is thinking of organizing a fundraiser to support a local charity. She has planned to rent a banquet hall and provide the guests with food, entertainment, and various party favors. She has decided to charge $500 a person. After researching around town, Kim has discovered the following costs:How many guests must attend in order for Kim to break even?
Answer(s): C
The breakeven formula equates operating income with sales minus fixed costs minus variable costs. By setting operating income equal to 0, the number needed to break even can be found.
Kim is thinking of organizing a fund raiser charity. She has planned to rent a banquet hall and provide to support a local the guests with food, entertainment, and various party favors. She has decided to charge $500 a person. After researching around town, Kim has discovered the following costs:If Kim's goal is to raise $10,000 for her charily, how many people must attend the banquet?
Answer(s): D
The breakeven formula equates operating income with revenues minus fixed costs minus variable costs. By setting operating income equal to the desired amount of income, the number of guests required can be discovered.
The following information relates to Clyde Corporation, Which produced and sold 50,000 units a recent accounting period:For the next accounting period. if production and sales are ,expected to be 40.000 units, the company should anticipate a contribution margin par unit of
Unit contribution margin is the deference between unit selling price and unit variable cost Unit selling price is $17 ($850,000 + 50.000 unit). and unit variable cost is $370 [(S 140.000 variable manufacturing cost + $45,000 variable S&A cost) + 50000 units sold] Accordingly, unit contribution margin is $13.30 ($17 - $3 70).
A company manufactures a single product. Estimated cost data regarding this product and other information for the product and the company are as follows:Sales price per unit $40Total variable production cost per unit $22Sales commission (on sales) 5%Fixed costs and expenses:Manufacturing overhead $5,598,720General and administrative $3,732,480Effective income tax rate 40%The number of units the company must sell in the coming year in order to reach its breakeven point is
The breakeven point is determined by dividing total fixed costs by the unit contribution margin. The total fixed costs are $9,331,200 ($5,598,720 manufacturing overhead + $3,732,480 general and administrative). The contribution margin is $16.00 ($40 sales price --$22 variable production cost-- $2.00 commission). Thus, the breakeven point is 583,200 units ($9,331,200 ÷ $16).
A company makes a product that sells for $30. During the coming year, fixed costs are expected to be $180.000, and variable costs are estimated at $26 per unit. How many units must the company sell to break even?
The contribution to overhead per unit is $4.00. Fixed costs of $180,000 divided by the contribution of $4.00 gives breakeven sales volume of 45,000 units.
Post your Comments and Discuss Financial CMA exam prep with other Community members:
Our website is free, but we have to fight against AI bots and content theft. We're sorry for the inconvenience caused by these security measures. You can access the rest of the CMA content, but please register or login to continue.