a) What is the break-even point for each oven? b) what is fixed coast? c) what is revenue? d) variable coast? what is BEP for pizzas?
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Hw.3.
Jenelle Heinke, the owner of Ha'Peppas Pizza is considering a new oven in which to bake the firm's signature disk, veggie pizza. Oven type A can handle 25 pizzas per hour. The fixed costs with oven A are $25,000 and the variable costs are $2.50 per pizza. Oven B is larger and can handle 40 pizzas an hour. The fixed cost associated with oven B is $30,000 and the variable costs are $1.50 per pizza. The pizzas sell for $15 each.
a) What is the break-even point for each oven?
b) what is fixed coast?
c) what is revenue?
d) variable coast?
what is BEP for pizzas?
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- Janelle Heinke, the owner of HaPeppast, is considering a new oven in which to bake the firm's signature dish, vegetarian pizza Oven type A can handle 20 pizzas an hour. The fixed costs associated with oven A are $20,000 and the variable costs are $2.00 per pizza. Oven B is larger and can handle 42 pizzas an hour. The fixed costs associated with oven B are $32,500 and the variable costs are $1.00 per pizza. The pizzas sell for $14.00 each a) The break-even point in units for oven type A units (round your response to the nearest whole number)Reagan, Inc., has developed a chew-proof dog bed—the Tuff-Pup. Fixed costs are $204,400 per year. The average price for the Tuff-Pup is $36, and the average variable cost is $22 per unit.Currently, Reagan produces and sells 20,000 Tuff-Pups annually.Required:1. How many Tuff-Pups must be sold to break even?2. If Reagan wants to earn $95,900 in profit, how many Tuff-Pups must be sold? Prepare a variable-costing income statement to verify your answer.3. Suppose that Reagan would like to lower the break-even units to 12,000. The company does not believe that the price or fixed cost can be changed. Calculate the new unit variable costthat would result in break-even units of 12,000. (Round to the nearest cent.)4. What is Reagan’s current contribution margin and operating income? Calculate the degree of operating leverage (round your answer to four decimal places). If sales increased by 10percent next year, what would the percent change in operating income be? What would the new total…4. Shelby Industries has a capacity to produce 45,000 oak shelves per year and is currently selling 40,000 shelves for $32 each. Martin Hardwoods has approached Shelby about buying 1,200 shelves for a new project and is willing to pay $26 each. The shelves can be packaged in bulk; this saves Shelby $1.50 per shelf compared to the normal packaging cost. Shelves have a unit variable cost of $27 with fixed costs of $350,000. Because the shelves don’t require packaging, the unit variable costs for the special order will drop from $27 per shelf to $25.50 per shelf. Shelby has enough idle capacity to accept the contract. PLEASE NOTE: All dollar amounts are rounded to whole dollars, except for per shelf, which are rounded to two decimal places. All dollars are shown with "$" and commas as needed (i.e. $12,345). When negotiating the price: What is the minimum price per shelf that Shelby should accept for this special order? per shelf. If accepted, what are the total sales?
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- Karens Quilts is considering the purchase of a new Long-arm Quilt Machine that will cost $17,500 and will increase her fixed costs by $119. What would happen if she purchased the new quilt machine to realize the variable cost savings of $5.00 per quilt, and what would happen if she raised her price by just $5.00? She feels confident that such a small price increase will not decrease the sales in units that will help her offset the increase in fixed costs. Given the following current prices how would the break-even in units and dollars change? Complete the monthly contribution margin income statement for each of these cases.Kylies Cookies is considering the purchase of a larger oven that will cost $2,200 and will increase her fixed costs by $59. What would happen if she purchased the new oven to realize the variable cost savings of $0.10 per cookie, and what would happen if she raised her price by just $0.20? She feels confident that such a small price increase will decrease the sales by only 25 units and may help her offset the increase in fixed costs. Given the following current prices how would the break-even in units and dollars change if she doesnt increase the selling price and if she does increase the selling price? Complete the monthly contribution margin income statement for each of these cases.Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Cutrate Furniture approached Jansen about buying 1,200 shelves for bookcases it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shell. The $1.50 per-shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320.000. However, the $130 packaging cost will not apply in this case. The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jansen accepts the special order? A. Profits will decrease by $1,200. B. Profits will increase by $31,200. C. Profits will increase by $600. D. Profits will increase by $7,200.
- M4 Engineering is considering an investment in one of two machines. The CNC machine will increase productivity from producing 150 airplane mounting clamps per hour to producing 290 per hour. The contribution margin per unit is $0.32 per clamp. Assume that any increased production of clamps can be sold. The second machine is an automatic packing machine. The packing machine will reduce packing labor cost. The labor cost saved is equivalent to $21 per hour. The CNC machine will cost $260,000, have an eight-year life, and will operate for 1,800 hours per year. The packing machine will cost $85,000, have an eight-year life, and will operate for 1,400 hours per year. M4 Engineering seeks a minimum rate of return of 15% on its investments. Calculate the NPV and PV index for both machines (the packing machine will have a higher PV index). Utilize the PV tables from chapter 11/ chapter 25 for your calculations. What machine should be purchased? Address both financial and non-financial reasons…Elise and her friend Eloi developed an online car repair training course and sell it for $67.50 per course. The contribution margin per course is $23.00 and to break-even they need to have a total revenue of $32,000.00 per annum. a. What is the break-even volume? Round up to the next whole number b. What is the fixed costs per annum? Round to the nearest cent c. What is the total revenue if they sell 3,050 courses this year?Common costs. Tate Inc. and Booth Inc. are two small manufacturing companies that are considering leasing a cutting machine together. If Tate rents the machine on its own, it will cost $26,000. If Booth rents the machine alone, it will cost $14,000. If they rent the machine together, the cost will decrease to $36,000.
