Question : 103. Lowman Inc. sells a product with a sales price of : 1291708

 

103. Lowman Inc. sells a product with a sales price of $25 per unit, variable costs of $10 per unit, and total fixed costs of $100,000. Lowman is looking into implementing an aggressive advertising campaign that will cost $45,000. 

 

104. Sweet Baby Inc. produces two types of children’s specialty bed products – Baby Cribs and Toddler Beds. The following information is available related to each product: 

 

Baby Crib

 

Toddler Bed

Sales price per unit

$600

 

$500

Variable costs per unit

150

 

200

 

 

 

 

Baby cribs account for 60% of total product sales and toddler beds account for the rest. Sweet Baby’s total fixed costs are $1,170,000.Required: 

A.

How many total children’s bed products does the company need to produce and sell in order to break even?

 

 

B.

How many baby cribs need to be sold in order to break even?

 

 

 

 

 

105. Hugo Inc. sells three sizes of umbrellas: small, medium, and large. The company has annual fixed costs of $390,400. For the past several years, 20% of Hugo’s sales have been the small and large umbrellas each and with the remaining 60% being the medium size. Hugo does not expect this to change in the upcoming year.The following information is also available for each of the umbrellas: 

 

Small

 

Medium

 

Large

Sales price per unit

$8

 

$14

 

$35

Variable costs per unit

  3

 

   4

 

   9

 

 

 

 

 

 

Required: 

A.

How many total umbrellas does the company need to produce and sell in order to break even?

 

 

B.

How many medium umbrellas need to be sold in order to break even?

 

 

C.

If Hugo experiences a higher demand of large umbrellas than it anticipated, will the break-even point increase, decrease, or stay the same? Why?

 

 

 

 

 

106. Greenwood Manufacturing has the following product information: 

Sales price

$60.00 per unit

Variable costs

$28.00 per unit

Fixed costs

$60,800

 

 

Required: Calculate the following based on the above information: 

A.

What is the break-even point in units?

 

 

B.

What is the break-even point in sales dollars?

 

 

C.

How many units need to be sold in order for the company to earn a target-profit of $500,000? (ignore taxes)

 

 

 

 

 

107. Sienna Manufacturing has the following product information: 

Sales price

$20.00 per unit

Variable costs

$8.00 per unit

Fixed costs

$45,000

 

 

Required: Calculate the following based on the above information: 

A.

What is the break-even point in units?

 

 

B.

What is the break-even point in sales dollars?

 

 

C.

How many units need to be sold in order for the company to earn a target-profit of $499,800? (ignore taxes)