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soluciones cap 5-1 - Problems 1 Gateway Appliance toasters...

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Problems 1. Gateway Appliance toasters sell for $20 per unit, and the variable cost to produce them is $15. Gateway estimates that the fixed costs are $80,000. a . Compute the break-even point in units. b . Fill in the table below (in dollars) to illustrate the break-even point has been achieved. Sales ............................... ___________ _ – Fixed costs ................... ___________ _ – Total variable costs ...... ___________ _ Net profit (loss) .............. ___________ _ 5-1. Solution: Gateway Appliance a. b. Sales $320,000 (16,000 units × $20) –Fixed costs $ 80,000 –Total variable costs 240,000 (16,000 units × $15) Net profit (loss) $ 0
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2. Hazardous Toys Company produces boomerangs that sell for $8 each and have a variable cost of $7.50. Fixed costs are $15,000. a . Compute the break-even point in units. b . Find the sales (in units) needed to earn a profit of $25,000. 5-2. Solution: The Hazardous Toys Company a. b.
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2. Hazardous Toys Company produces boomerangs that sell for $8 each and have a variable cost of $7.50. Fixed costs are $15,000. a . Compute the break-even point in units. b . Find the sales (in units) needed to earn a profit of $25,000.
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