B 400000 c 1000000 d 1200000 174 cso 2c1a los 2c1f

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b. $400,000. c. $1,000,000. d. $1,200,000. 174. CSO: 2C1a LOS: 2C1f Bargain Press is considering publishing a new textbook. The publisher has developed the following cost data related to a production run of 6,000, the minimum possible production run. Bargain Press will sell the textbook for $45 per copy. Estimated cost Development (reviews, class testing, editing) $35,000 Set-up costs 18,500 Depreciation on Equipment 9,320 General and Administrative 7,500 Miscellaneous Fixed Costs 4,400 Supervisor’s Salary 30,000 Sales staff commissions (2% of selling price) 5,400 Bookstore commissions (25% of selling price) 67,500 Author’s Royalties (10% of selling price) 27,000 Total costs at production of 6,000 copies $204,620 How many textbooks must Bargain Press sell in order to generate operating earnings (earnings before interest and taxes) of 20% on sales? (Round your answer up to the nearest whole textbook.) a. 2,076 copies. b. 5,207 copies. c. 5,412 copies. d. 6,199 copies.
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209 175. CSO: 2C1a LOS: 2C1f Zipper Company invested $300,000 in a new machine to produce cones for the textile industry. Zipper’s variable costs are 30% of the selling price, and its fixed costs are $600,000. Zipper has an effective income tax rate of 40%. The amount of sales required to earn an 8% after-tax return on its investment would be a. $891,429. b. $914,286. c. $2,080,000. d. $2,133,333. 176. CSO: 2C1a LOS: 2C1a Breakeven quantity is defined as the volume of output at which revenues are equal to a. marginal costs. b. total costs. c. variable costs. d. fixed costs. 177. CSO: 2C1a LOS: 2C1b Eagle Brand Inc. produces two products. Data regarding these products are presented below. Product X Product Y Selling price per unit $100 $130 Variable costs per unit $80 $100 Raw materials used per unit 4 lbs. 10 lbs. Eagle Brand has 1,000 lbs. of raw materials which can be used to produce Products X and Y. Which one of the alternatives below should Eagle Brand accept in order to maximize contribution margin? a. 100 units of product Y. b. 250 units of product X. c. 200 units of product X and 20 units of product Y. d. 200 units of product X and 50 units of product Y.
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210 178. CSO: 2C1b LOS: 2C1b For the year just ended, Silverstone Company’s sales revenue was $450,000. Silverstone’s fixed costs were $120,000 and its variable costs amounted to $270,000. For the current year sales are forecasted at $500,000. If the fixed costs do not change, Silverstone’s profits this year will be a. $60,000. b. $80,000. c. $110,000. d. $200,000. 179. CSO: 2C1b LOS: 2C1e Breeze Company has a contribution margin of $4,000 and fixed costs of $1,000. If the total contribution margin increases by $1,000, operating profit would a. decrease by $1,000. b. increase by more than $1,000. c. increase by $1,000. d. remain unchanged. 180. CSO: 2C1b LOS: 2C1b Wilkinson Company sells its single product for $30 per unit. The contribution margin ratio is 45% and Wilkinson has fixed costs of $10,000 per month. If 3,000 units are sold in the current month, Wilkinson’s income would be a. $30,500. b. $49,500. c. $40,500. d. $90,000.
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211 181. CSO: 2C1c LOS: 2C1h Cervine Corporation makes motors for various products. Operating data and unit cost information for its products are presented below.
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