ADMQuizAnswerKeyFall2007

ADMQuizAnswerKeyFall2007 - Question 1: Breakeven Point...

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Question 1: Breakeven Point Analysis You are given the following data: Yearly lease expense $100,000.00 Selling price per unit $20.00 Wages per unit produced $3.00 Annual salaries $100,000.00 Yearly rent expense $14,000.00 Overhead cost per unit produced $5.00 Raw materials cost per unit produced $4.00 a) How many units need to be produced to at least breakeven? (10 points) Fixed Costs: $100, 000 + $100, 000 + $14, 000 = $214, 000 (3 points) Variable Costs: $3.00 + $5.00 + $4.00 = $12.00 (3 points) Selling Price: $20.00 BEP = FC / UC = 214, 000/ 8.00 = 26,750 units (4 points) b) Using the above information, draw a breakeven diagram and properly label all appropriate points. (10 points) **BEP in dollars = 26750 units * 20.00 = $535,000 1 point for drawing diagram Breakeven point (2 points) Fixed Costs (1 point) Units Produced (1 point) Dollars (1 point) Total Costs (1 point) Total Sales (1 point) Profit (1 point) Loss (1 point) 26750 535,000 214,000
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Question 2: Economic Order Quantity You are given the following data for the ABC Corporation:
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ADMQuizAnswerKeyFall2007 - Question 1: Breakeven Point...

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