Question : Objective 9.A Answer the following questions using the information below: Ms. : 1217289

 

Objective 9.A

 

Answer the following questions using the information below:

 

Ms. Janice Meyers, the company president, has heard that there are multiple breakeven points for every product. She does not believe this and has asked you to provide the evidence of such a possibility. Some information about the company for 2011 is as follows:

 

Total fixed manufacturing overhead$180,000

Total other fixed expenses$200,000

Total variable manufacturing expenses$240,000

Total other variable expenses$240,000

Units produced60,000units

Budgeted production60,000units

Units sold50,000units

Selling price$40

 

1) What are breakeven sales in units using variable costing?

A) 5,625 units

B) 5,769 units

C) 11,875 units

D) 12,180 units

 

2) What are breakeven sales in units using absorption costing?

A) 5,625 units

B) 6,667 units

C) 6,897 units

D) 8,000 units

3) What are breakeven sales in units using absorption costing if the production units are actually 25,000?

A) 5,625 units

B) 6,667 units

C) 7,667 units

D) 7,931 units

 

Answer the following questions using the information below:

 

The following information pertains to the Bean Company:

 

Selling price per unit$123

Standard fixed manufacturing costs per unit$60

Variable selling and administrative costs per unit$12

Standard variable manufacturing costs per unit$3

Fixed selling and administrative costs$48,000

Units produced10,000units

Units sold9,600units

 

4) What is the variable costing breakeven point in units?

A) 833 units

B) 5,556 units

C) 5,838 units

D) 6,000 units

5) What is the absorption costing breakeven point in units?

A) 917 units

B) 1,000 units

C) 5,838 units

D) 6,000 units

 

Answer the following questions using the information below:

 

Greene Manufacturing incurred the following expenses during 2011:

 

Fixed manufacturing costs$45,000

Fixed nonmanufacturing costs$35,000

Unit selling price$100

Total unit cost$40

Variable manufacturing cost rate$20

Units produced1,340units

 

6) What will be the breakeven point if variable costing is used?

A) 1,334 units

B) 1,125 units

C) 1,000 units

D) 563 units

7) What will be the breakeven point in units if absorption costing is used?

A) 1,330 units

B) 1,000 units

C) 887 units

D) 563 units

 

8) What is the breakeven point in units using absorption costing if the units produced are actually 2,250?

A) 1,330 units

B) 1,000 units

C) 887 units

D) 584 units

9) The formula for computing the breakeven point in units under variable costing includes all of the following EXCEPT:

A) total fixed costs

B) contribution margin percentage

C) target operating income

D) contribution margin per unit

 

10) Bosely Corporation is in the business of selling computers.  The following expenses were incurred in March 2011:

 

Fixed manufacturing costs$75,000

Fixed nonmanufacturing costs$35,000

Unit selling price$1,200

Variable manufacturing cost$700

Units produced1,500

 

What will be the breakeven point if variable costing is used?

A) 150 units

B) 220 units

C) 157 units

D) 92 units

 

11) The breakeven points are the same under both variable costing and absorption costing.

12) Sutton Hot Dog Stand sells hot dogs for $1.35. Variable costs are $1.05 per unit with fixed production costs of $90,000 per month at a level of 400,000 units. Fixed administrative costs total $30,000. Sales average 400,000 units per month, with planned production of 400,000 hot dogs.

 

Required:

a.What are breakeven unit sales under variable costing?

b.What are breakeven unit sales under absorption costing if she sells everything she prepares?

c.What are breakeven unit sales under absorption costing if average sales are 498,000 and planned production is changed to 500,000?