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A pen manufacturer makes luxury pens. The pen case costs $7.26 each, the ink holder costs $1.26 each, the spring costs $.07 each, and the velvet pen...

7. A pen manufacturer makes luxury pens. The pen case costs $7.26 each, the ink holder costs $1.26 each, the spring costs $.07 each, and the velvet pen case costs $0.91 each. The plant has general and administrative costs of $55,000 and fixed selling expenses of $37,500. The pens sell for $39.95 each. Plant capacity is 4,000 pens per period. At what percentage of capacity is the break-even point?


8. Excel Hardware is introducing a new product on a new product line with capacity of 800 units per week at a production cost of $50 per unit. Fixed costs are $22,400 per week. Variable selling and shipping costs are estimated to be $20 per unit. Excel plans to market the new product at $110 per unit. What would be the weekly net income at 90% of the capacity?


9. Sunbeam wants to sell microwaves at a unit contribution margin of $42 and a unit contribution rate of 60%. What should be the break-even volume if the fixed cost of production is kept below $10,000.

Top Answer

7) Breakeven point = 75.95% of the... View the full answer

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