Answer:
we should ask the bank for extra time
Because this market is a monopolistically competitive market, the firm's average cost in long-run equilibrium is the long-run average cost it would achieve as a firm operating in a perfectly competitive market. The production level of a monopolistically competitive firm in long-run equilibrium is the production level of a perfectly competitive firm. This difference in output is predicted by the
Answer:
The correct answer is "Higher than, Lower than and Excess production theory".
Explanation:
Under Monopolistic Competition:
Average cost = 70
Production level = 50
Under perfect competition:
Average cost = 65
Production level = 70
Excess capacities are a circumstance where an economic performance would be less than the commodity that somehow a company might offer to that same marketplace.Throughout terms of long-lasting balances, the commodity demand of such a monopolistic competition corporation is lesser than that of a complete business entity.On June 30, Collins Management Company purchased land for $640,000 and a building for $960,000, paying $800,000 cash and issuing a 7% note for the balance, secured by a mortgage on the property. The terms of the note provide for 20 semiannual payments of $40,000 on the principal plus the interest accrued from the date of the preceding payment.a. Journalize the entry to record the transaction on June 30. June 30.b. Journalize the entry to record the payment of the first installment on December 31. Dec. 31.c. Journalize the entry to record the payment of the second installment the following June 30. Assume a 360-day year
Answer:
hhd
soon after the following URLS
During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $229,134 instead of the correct amount of $165,639. The effect on the balance sheet and income statement would be
Answer:
Assets will be overstated and Net Income understated
Explanation:
The effect on the balance sheet and income statement
Balance Sheet :
Inventory will be overstated
Inventory belongs to the Current Asset group
Meaning Assets will be overstated
Income Statement :
Inventory will be overstated
This reduces cost of sales with an amount greater
Meaning Profits will be overstated
Conclusion
The effect on the balance sheet and income statement would be : Assets will be overstated and Net Income understated.
Journalize the entries to record the following transactions for Mountain Realty Inc.:
Aug.26 Issued for cash 128,000 shares of no-par common stock The stock outstanding when a corporation has issued only one class of stock. (with a stated value of $5) at $6.
Oct.1 Issued at par value 41,000 shares of preferred 1% stock, $10 par The monetary amount printed on a stock certificate. for cash.
Nov. 30 Issued for cash 17,000 shares of preferred 1% stock, $10 par at $11
Answer and Explanation:
The journal entries are shown below"
On Aug 26
Cash Dr $768,000
To Common stock $640,000
To Additional paid in capital $128,000
(Being issuance of the common stock is recorded)
On Oct 1
Cash Dr $410,000
To preferred stock $410,000
(Being the issuance of the preferred stock is recorded)
On Nov 30
Cash Dr $187,000
To Common stock $170,000
To Additional paid in capital $17,000
(Being issuance of the common stock is recorded)
Identify the following costs as fixed or variable:
Costs related to plane trips between Boston, Massachusetts, and San Diego, California, follow. Pilots are paid on a per-trip basis.
a. Pilots’ salaries relative to the number of trips flown.
b. Depreciation relative to the number of planes in service.
c. Cost of refreshments relative to the number of passengers.
d. Pilots’ salaries relative to the number of passengers on a particular trip.
e. Cost of a maintenance check relative to the number of passengers on a particular trip.
f. Fuel costs relative to the number of trips.
Answer:
In simple words, fixed cost refers to the cost that remain stable every time whereas the variable cost are the costs that changes with every change in the level of operations. Thus, the given expenditures can be categorized as follows :
1. Variable cost
2. Fixed costs
3. Variable costs
4. Fixed cost
5. Fixed cost
6. Variable cost
Consumers' Willingness to Pay Musashi: $25 Jacques: $40 Kyoko: $35 Rina: $10 Firms' Costs Firm A: $15 Firm B: $30 Firm C: $20 Firm D: $10 Each firm has the capacity to produce only one haircut. For efficiency, should be given. Which businesses should cut hair
Answer:
For efficiency, 4 haircuts should be given.
If a haircut is to be given, the cost of the haircut to a firm should be less than or equal to the willingness to pay of the customer going there.
Firm A's cost is less than Musashi's willingness to pay so Firm A can cut. Firm B's cost is less than Jacques's willingness to pay so Firm B can cut. Firm C's cost is less than Kyoko's willingness to pay so Firm C can cut. Firm D's cost is equal to Rina's willingness to pay so Firm D can cut.
That makes 4 firms that can cut therefore 4 haircuts.
The business that should cut as shown above are:
Firm AFirm B Firm C Firm D.Demand is forecast for the next five months as 200, 300, 500, 300, 200. If the production planner decides to adopt a level strategy over the next five months, what quantities of products should be produced?
Answer:
The quantities of products that should be produced each month are:
300, 300, 300, 300, and 300 respectively.
Explanation:
a) Data and Calculations:
Production Scheduling Based on Level Strategy:
Month 1 Month 2 Month 3 Month 4 Month 5 Total
Beginning Inventory 0 100 100 -100 -100 0
Production 300 300 300 300 300 1,500
Forecast Demand 200 300 500 300 200 1,500
Ending Inventory 100 100 -100 -100 0 0
b) The implication is that the firm will be running in shortage for two months within the five months period. This is not ideal to meet customers' demands. It appears very costly with the holding and shortage costs throughout the period.
Required information Use the following information for Exercises 16-18 below. Skip to question [The following information applies to the questions displayed below.] Carmen Camry operates a consulting firm called Help Today, which began operations on August 1. On August 31, the company’s records show the following selected accounts and amounts for the month of August. Cash $ 25,270 Dividends $ 5,910 Accounts receivable 22,280 Consulting fees earned 26,920 Office supplies 5,150 Rent expense 9,460 Land 43,940 Salaries expense 5,510 Office equipment 19,910 Telephone expense 760 Accounts payable 10,700 Miscellaneous expenses 430 Common stock 101,000 Exercise 2-16 Preparing an income statement LO C3, P3 Use the above information to prepare an August income statement for the business.HELP TODAY Balance Sheet Liabilities: 25,310 Accounts payable 22,320 5,200 Equity: 19,960 Common stock 43,970 Retained earnings Assets: ces Cash $ 10,700 Accounts receivable Office supplies Office equipment Land 101,400 4,660 Total equity $ 116,760 Total Liabilities and Equity 106,060 Total Assets 116,760
Answer:
Help Today
HELP TODAY
Income Statement for the year ended August 31,
Consulting fees earned $26,920
Office supplies $5,150
Rent expense 9,460
Salaries expense 5,510
Telephone expense 760
Miscellaneous expenses 430 $21,310
Net income $5,610
Dividends (5,910)
Retained earnings ($300)
HELP TODAY
Balance Sheet as of August 31
Assets
Current assets:
Cash $ 25,270
Accounts receivable 22,280 $47,550
Long-term assets:
Land 43,940
Office equipment 19,910 $63,850
Total assets $111,400
Liabilities and Equity
Current liabilities:
Accounts payable $10,700
Equity:
Common stock 101,000
Retained earnings (300) $100,700
Total liabilities and equity $111,400
Explanation:
a) Data and Calculations:
Cash $ 25,270
Dividends $ 5,910
Accounts receivable 22,280
Land 43,940
Office equipment 19,910
Accounts payable 10,700
Common stock 101,000
Consulting fees earned 26,920
Office supplies 5,150
Rent expense 9,460
Salaries expense 5,510
Telephone expense 760
Miscellaneous expenses 430
Auto Industries Company reported the following on its income statement:
Income before income taxes $420,000
Income tax expense (120,000)
Net income $300,000
If the income statement also shows interest expense equal to $80,000, what is the company's times interest earned ratio?
a. 5 times.
b. 6.25 times.
c. 5.25 times.
d. 8 times.
Answer:
Option c. 5.25 times is the correct answer.
Explanation:
Below is the calculation:
Income before income tax = $420000
Income tax expenses = 120000 dollars
Net income = $300000
Interest expense = $80000
Interest earned ratio = Earning Before Interest and Taxes / Interest Expenses
Interest earned ratio = 420000 / 80000
Interest earned ratio = 5.25 times
Option c. 5.25 times is the correct answer.
The Anson Jackson Court (AJC) currently has $150,000 market value (and book value) of perpetual debt outstanding carrying a coupon rate of 6%. Its earnings before interest and taxes (EBIT) are $89,000, and it is a zero growth company. AJC's current cost of equity is 10%, and its tax rate is 25%. The firm has 10,000 shares of common stock outstanding selling at a price per share of $60.00. Refer to the data for Anson Jackson Court (AJC). AJC is considering moving to a capital structure that is comprised of 25% debt and 75% equity, based on market values. The new funds would be used to replace the old debt and to repurchase stock. It is estimated that the increase in risk resulting from the additional leverage would cause the required rate of return on debt to rise to 6.56%, while the required rate of return on equity would rise to 10.07%. If this plan were carried out, what would be AJC's new WACC and total value
Answer:
The answer is "8.78%; $760,034"
Explanation:
Please find the complete solution in the attached file.
The Timberlake Company has the following information for August:
Cost of direct materials used in production $25000
Direct labor 35000
Factory overhead 20000
WIP, August 1 30000
WIP, August 31 25000
Requried:
a. Cost of goods manufactured
b. Cost of goods sold
Answer:
See below
Explanation:
1. Cost of goods manufactured
= Cost of direct materials uses in production + Direct labor + Factory overhead
= $25,000 + $35,000 + $20,000
= $80,000
2. Cost of goods sold
= Opening stock + Purchases - Closing stock
Or
Gross income = Gross revenue - Cost of goods sold
Hence we are not able to calculate cost of goods sold with the given information.
Compute the future value of a $105 cash flow for the following combinations of rates and times.
a. r = 8%; t = 10 years
b. r = 8%; t = 20 years
c. r = 4%; t = 10 years
d. r = 4%; t = 20 years
Answer:
The answer is
A. $226.69
B. $489.40
C. $155.43
D. $230.07
Explanation:
A.
PV = 105
i = 8%
N = 10years
FV =. ?
Using texas BA II plus
PV -105; I/Y = 8; N = 10; CPT FV= 226.69
Therefore, future value of $105 is $226.69
B.
PV = 105
i = 4%
N = 10years
FV =. ?
Using texas BA II plus
PV -105; I/Y = 8; N = 20; CPT FV= 489.40
Therefore, future value of $105 is $489.40
C.
PV = 105
i = 4%
N = 10years
FV =. ?
Using texas BA II plus
PV -105; I/Y = 4; N = 10; CPT FV= 155.43
Therefore, future value of $105 is $155.43
D.
PV = 105
i = 4%
N = 20years
FV =. ?
Using texas BA II plus
PV -105; I/Y = 4; N = 20; CPT FV= 230.07
Therefore, future value of $105 is $230.07
Brian and Crystal Alden live in Swarthmore, PA. Their son, Edison, owns his own plumbing business.
For each of the following transactions that occur in their lives, identify whether it is included in the calculation of U.S. GDP as part of consumption (C), investment (I), government purchases (G), exports (X), or imports (M).
Check all that apply.
Transaction C I G X M
Crystal gets a new video camera made in the United States.
Brian's employer assigns him to provide consulting services to an Australian firm that's opening a manufacturing facility in China.
Brian buys a sweater made in Guatemala.
The state of Pennsylvania repaves highway PA 320, which goes through the center of Swarthmore.
Edison buys a new set of tools to use in his plumbing business.
Answer:
Crystal gets a new video camera made in the United States. ⇒ CONSUMPTION.
This was a purchase to satisfy the needs and wants of a household so will fall under consumption.
Brian's employer assigns him to provide consulting services to an Australian firm that's opening a manufacturing facility in China. ⇒ EXPORTS.
Exports refer to goods and services being sent to another country. Brian is providing services to another country so this is an export.
Brian buys a sweater made in Guatemala. ⇒ CONSUMPTION AND IMPORTS
This was bought to satisfy a household need so is consumption. It was also imported from another country so falls under imports.
The state of Pennsylvania repaves highway PA 320, which goes through the center of Swarthmore. ⇒ GOVERNMENT SPENDING.
The state government of Pennsylvania is the one that did the spending here so it falls under government spending.
Edison buys a new set of tools to use in his plumbing business. ⇒ INVESTMENT.
This falls under investments as it is a purchase of capital goods that are intended to help in production of goods and services.
As a manager, Alejandro views his organization primarily as people and believes strongly in treating team members well to help them succeed. Which of the following orientations best describes Alejandro's leader orientation?
a. Symbolic orientation.
b. Human Resource orientation.
c. Structural orientation
d. Political orientation.
Answer:
b. Human Resource orientation.
Explanation:
It is correct to state that the orientation that most describes Alejandro's leader orientation is human resources, as the issue provides us with the information that Alejandro has an organizational vision based mainly on people and on the good direction of employees to help them succeed.
The orientation of human resources is related to the company's philosophy that will guide the behavior of employees and the organizational culture in accordance with the organizational mission and values. When a leader has this type of orientation focused on people, he encourages this behavior and so there is the dissemination of practices that value interpersonal relationships and collaboration, which can bring several benefits to an organization, such as increasing the value of work, greater innovation and productivity.
Example of Coping StrategiesYou have an employee who copes with stressful problems by burying his head in the sand and pretending the problem does not exist. You are concerned this approach just delays the inevitable and want him to cope in a way that better addresses the problem head on. Which of the following would be a problem-focused coping strategy?A. Join a support group.B. Adopt a "glass is half full not empty" mentality.C. Hit a punching bag to release the frustration.D. Ask a coworker to help lighten the load.
Answer:
Coping Strategies
The problem-focused coping strategy would be:
D. Ask a coworker to help lighten the load.
Explanation:
By asking a coworker to lighten the load, the worker has practically admitted that a problem exists and needs to be solved. The other listed coping strategies merely postpone the evil day when reality will dawn. Adopting a "glass is half-full not empty" mentality and "hitting a punching bag to release the frustration" sound pretentious. They do not tackle the problem.
Sturbridge Company manufactures fine furniture and grandfather clocks. Sturbridge has an excellent reputation, and each grandfather clock sells for several thousand dollars. Which of the following should not be treated as direct costs, assuming the cost object is individual clocks?
a. The clock face
b. The timing mechanism for each clock
c. Wood
d. Depreciation on dock-making equipment
Answer:
D)depreciation on clock making equipment
Explanation:
From the question we are informed about Sturbridge Company manufactures who fine furniture and grandfather clocks. Sturbridge has an excellent reputation, and each grandfather clock sells for several thousand dollars. In this case, all the following should be treated as direct costs, assuming the cost object is individual clocks;
✓ The clock face
✓The timing mechanism for each clock
✓Wood
A direct cost can be regarded as price which can be tied directly to manufacture of particular goods or services. Direct and indirect costs can be regarded as two major types of costs that can be incurred by companies. Direct costs are been regarded as variable costs often, i.e this cost could fluctuate as q result of production levels like inventory.
A bond pays annual interest its coupon rate is 9.2% lts value at maturity is $1,000. lt matures in 4 years. Its yield to maturity is currently 6.2%.What is the duration of this bond in years.A. 3.11B. 4.00C. 3.55D. 3.34
Answer:
Modified = 3.34
Macaulay = 3.55
Explanation:
Given :
Coupon rate = 9.2%
Value to maturity or face value = $1000
Yield to maturity = 6.2%
Years to maturity = 4 years
The bond duration in years cab be obtained using a financial calculator or excel ;
Inputting the values above into a financial calculator :
The modified duration is : 3.340
Tbe Macauley duration : 3.547
Iron Man Foundry produces multiple products, one of which is casting a hose nozzle. The daily demand for these nozzles is 1,000 units per day. If Iron Man currently operates one shift of eight hours what would be the Takt time
Answer: 0.48 minutes
Explanation:
Takt time = Net time available / Daily demand
Net time available is number of minutes in a shift so:
= 8 hours * 60 minutes
= 480 minutes
Daily demand = 1,000 units
Takt time = 480 / 1,000
= 0.48 minutes
Business operations Essay
Answer:
The description of the given term "Business operations" is provided below.
Explanation:
Together with all measures essential to manage as well as generate money besides your firm, is considered as business operations.Sometimes a component devoted to the industry would be included throughout the marketing strategies, enough so founding members comprehend or recognize the authoritarian leadership style, machinery, personnel, including procedures.Culler Construction Company agreed with the City of Orange Key to build a road. The project was to begin on December 1. One week after the work began, a hurricane struck the site, washing away so much land that the construction would be twice as expensive. As a result, Culler refused to continue the job, unless Orange Key paid a large sum in addition to the initial contract price. A promise by Orange Key to pay more than the original price is:_______
Answer: D. Enforceable because Culler encountered unforeseen difficulties.
Explanation:
Contractual obligations can be changed if one or both parties encounter unforeseen circumstances that would significantly alter their ability to fulfil their part of the contract.
In this scenario, Culler Construction would incur a significantly higher cost to carry out their side of the contract than what was agreed. The contract can therefore be changed and this change would be enforceable by law. The higher offer by Orange Key is therefore legal and enforceable.
A new coffee machine costs $50,850 and the finance office has quoted you an Annual Percentage Rate (APR) of 5.9%, compounded monthly, for 36 months. What is the Effective Annual Rate (EAR)?
Answer:
6.062189766%
Explanation:
[tex](1+\frac{.059}{12})^{36}=(1+i)^3\\[/tex]
Journalize the following transactions.a. On December 1, $13,250 was received for a service contract to be performed from December 1 through April 30. b. Assuming the work is performed evenly throughout the contract period, journalize the adjusting entry required on December 31.
Answer:
hello didi the code on their own lives r
Answer:
On December 1
$18000 To unearned revenue AC
Explanation:
$18000÷5months
=$3600
Crystal Corporation makes $3,100 payments every month for leasing office equipment. Crystal recorded a lease payment as follows: Lease payable 1,860 Interest expense 1,240 Cash 3,100 Amortization expense 1,860 Right-of-use asset 1,860 Crystal must have a(n):
Answer: Operating lease
Explanation:
An operating lease operates much like a rental type instrument. The asset being leased will not have its ownership rights transferred to the person leasing it and the person leasing it will be paying a certain amount every designated period that is equal to the Right of Use amount.
This is the case here as Crystal Corporation pays a certain amount every month for the leased equipment and this amount is the same as the Right-of-use asset amount. This is therefore an operating lease.
Which of the following is true of public goods? Question 9 options: a) The market mechanism helps to signal the quantity that is demanded by the public. b) The public sector is guided to produce the correct quantity by market prices. c) Consumption by one person does not preclude consumption of the same good by another person. d) Payment for consumption is efficiently provided by market prices.
Answer:
c
Explanation:
A public good is a good that is non excludable and non rivalrous.
For example, if there is a statue in a park, Everyone has assess to the statue and because one person is enjoying the view of the statue does not means another person cannot enjoy the view of the statue
A market Group of answer choices always requires face-to-face contact between buyer and seller. reflects upsloping demand and downsloping supply curves. is an institution that brings together buyers and sellers. entails the exchange of goods, but not services.
Answer:
Option C "is an........sellers" is the right answer.
Explanation:
The market is considered as a location wherever vendors as well as purchasers gather together or enable their exchange of goods and commodities of products or even just providers.It could be like a department shop wherever individuals keep in touch throughout real life or virtually like such an internet market, where other businesses and consumers weren’t directly connected.The provided situation isn't linked to other alternatives. Thus the above response is the right one.
Item 12 Firm X is being acquired by Firm Y for $35,000 cash which is being provided by retained earnings. The synergy of the acquisition is $5,000. Firm X has 2,000 shares of stock outstanding at a price of $16 a share. Firm Y has 10,200 shares of stock outstanding at a price of $46 a share. What is the value of Firm Y after the acquisition
Answer:
$471,200
Explanation:
Value of firm Y before acquisition = $46 * 10,200 shares
Value of firm Y before acquisition = $469,200
Book value of firm X = $16 * 2,000
Book value of firm X = $32,000
Cash provided to firm X = $35,000
Synergy of the acquisition = $5,000
Value of firm Y after acquisition = $469,200 + ($32,000 - $35,000) + $5,000
Value of firm Y after acquisition = $469,200 - $3,000 + $5,000
Value of firm Y after acquisition = $471,200
Assume the risk-free rate is 4%. You are a financial advisor, and must choose one of the funds below to recommend to each of your clients. Whichever fund you recommend, your clients will then combine it with risk-free borrowing and lending depending on their desired level of risk.
Expected Return Volatility
Fund A 10% 10%
Fund B 15% 22%
Fund C 6% 2%
Required:
a. Which fund would you recommend to a client seeking the highest possible expected return with a maximum volatility of 22%?
b. Which fund would you recommend to a client seeking the highest possible expected return with a maximum volatility of 22%?
c. Which fund would your recommend without knowing your clients risk preference?
Answer:
Following are the solution to the given point.
Explanation:
Calculate each fund's Sharpe ratio. It Fund is the best danger reward with the highest Sharpe ratio.
[tex]\text{Sharpe Ratio} = \frac{\text{(Fund return - \text{risk free return)}}}{Volatility}\\\\\to Fund A= \frac{(10\%-4\%)}{10\%} = 0.6\\\\\to Fund B= \frac{(15\%-4\%)}{22\%} = 0.5\\\\\to Fund C = \frac{(6\%-4\%)}{2\%}=1.0\\\\[/tex]
Fund C consequently offers the best risk-benefit. and without understanding client risk preference, we will advise Fund C for any clients. If a client wants to have a 22 percent minimum volatility, we'll nevertheless propose that Fund C instead of Fund B is available, because an investor can take risk-free rates to the degree that the total portfolio volatility stands at 22 percent and deposit it in Fund C.
Bell Corporation reports that at an activity level of 8,700 units, its total variable cost is $653,109, and its total fixed cost is $658,416.
Required: For the activity level of 8,800 units, assume this level is within the relevant range. Compute: the total variable cost, the total fixed cost, the total cost, the average variable cost per unit, the average fixed cost per unit, and the average total cost per unit.
There is not a word length requirement for this question; however, you must show your work.
Answer:
Bell Corporation
The total variable cost is = $660,616
The total fixed cost is = $658,416
The total cost is = $1,319,032
The average variable cost per unit is = $75.07
The average total cost per unit is = $149.89
Explanation:
a) Data and Calculations:
Current activity level = 8,700 units
Variable cost based on the current activity level = $653,109
Unit variable cost = $75.07 ($653,109/8,700)
Fixed cost = $658,416
At activity level of 8,800 units, since 8,800 units are within the relevant range:
The total variable cost = $660,616 (8,800 * $75.07)
The total fixed cost = $658,416 (same as at 8,700 units)
The total cost = $1,319,032 ($660,616 + $658,416)
The average variable cost per unit = $75.07 ($653,109/8,700)
The average total cost per unit = $149.89 ($1,319,032/8,800)
Insurance.Susan,a trained nurse,was recently elected to the U.S.Senate.Susan is very concerned about the lack of insurance for many children and also working adults who cannot afford the insurance premiums.She proposes legislation that states are taxed sufficiently to provide health insurance coverage to children and that federal funds for state highways are denied to any state that does not also provide insurance coverage for uninsured adults.She also proposed that states with citizens earning higher than average incomes be taxed at a higher rate than other states.Bill,a senator,tells Susan that Congress lacks the authority to tax in this manner because the U.S.Constitution expressly reserves that right to the states.Ellen,another senator,tells Susan that Congress has no authority to link highway funds or any other funds with social welfare objectives.Sam,an administrative assistant,tells Susan that Congress is prohibited from taxing residents of one state at a higher rate than citizens of another state.Which of the following is true regarding Ellen's statement?
A) Ellen is correct.
B) Ellen is correct only if the state is making efforts to put social programs into effect and is not acting unreasonably in refusing to provide needed services.
C) Ellen is partially correct in that Congress has no authority to link highway funds with social services,but any other funds may be linked to social services by executive order.
D) Ellen is partially correct in that Congress has no authority to link highway funds with social services,but other funds may be linked to social services by an act of Congress.
E) Ellen is incorrect.
Answer: E. Ellen is incorrect.
Explanation:
From the information provided, we can deduce that Bill is incorrect. This is because the statement made by Bill that "Congress lacks the authority to tax in this manner because the U.S.Constitution expressly reserves that right to the states" is incorrect. It should be noted that the constitution of the United States contains no such reservation.
Also, Ellen is incorrect. This is because the Congress has the authority to link highway funds or any other funds with social welfare objectives.
Blanchard Company manufactures a single product that sells for $ 180 per unit and whose total variable costs are $ 126 per unit . The company's annual fixed costs are $ 842,400 . ( 1 ) Prepare a contribution margin Income statement for Blanchard Company showing sales , variable costs , and fixed costs at the break even point . ( 2 ) Assume the company's fixed costs increase by $ 141.000 . What amount of sales ( dollars ) is needed to break even
Answer:
Part 1
Income Statement at 15,600 units
Sales ($ 180 x 15,600) $2,808,000
Less Variable Costs ($126 x 15,600) ($1,965,600)
Contribution $842,400
Less Fixed Costs ($842,400)
Net Income $0
Part 2
$3,278,000
Explanation:
Break even (units) = Fixed Cost ÷ Contribution per unit
= $ 842,400 ÷ ($ 180 - $126)
= 15,600 units
Assume the company's fixed costs increase by $ 141.000
Break even (units) = Fixed Cost ÷ Contribution per unit
= ($ 842,400 + $ 141.000) ÷ ($ 180 - $126)
= 18,212 units
Break even Revenue = 18,212 x $ 180 = $3,278,000