Hi ,
Answer for question 29 :
Fixed cost - 35000 + 18500 +9320+ 7500 + 4400 = 74720
Variable Cost - 204620 - 74720 = 129900
Variable cost per unit - 129900/6000 = 21.65
earnings before interest and taxes 20% on sales = 0.2*45*q
0.2*45*q = (45 - 21.65) q -74720
9q =23.35q - 74720
q = 5206.96
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Sanjana
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Original Message:
Sent: 08-10-2020 11:37 AM
From: VAN HUA
Subject: Help explain Questions of Part 2
Hi,
It would be great if you can help you explain the anwer of questions below? Thanks in advance.
P/s: besides, can add me (84913628099) in whatsapp for part 2 study group?
Question 29 (Answer C):
Specialty Cakes Inc. produces two types of cakes, a 2 lbs. round cake and a 3 lbs. heart- shaped cake. Total fixed costs for the firm are S94,000. Variable costs and sales data for the two types of cakes are presented below.
- Selling price per unit : $20
- Variable cost per unit: $15
- Current sales (units) : 15,000
Round Cake (2 lbs)
- Selling price per unit : $12
- Variable cost per unit: $8
- Current sales (units) : 10,000
If the product sales mix were to change to three heart-shaped cakes for each round cake, the breakeven volume for each of these products would be
A. 8,174 round cakes, 12,261 heart-shaped cakes.
B. 12,261 round cakes, 8,174 heart-shaped cakes.
C. 4.947 round cakes, 14,842 heart-shaped cakes.
D. 15.326 round cakes, 8.109 heart-shaped cakes.
Question 31( Answer B)
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 S45 per copy. How many textbooks must Bargain Press sell in order to generate operating carnings (earnings before interest and taxes) of 20% on sales? (Round your answer up to the nearest whole textbook.)
- Development (reviews, class testing, editing): $35,000
- Depreciation on Equipment:9,320
- General and Administrative: 7,500
- Miscellaneous Fixed Costs 4,400
- Printing and Binding: 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
A.2.076 copies.