1. Using a detailed graph, determine the breakeven point, assuming the selling price of a product is...
Question:
1. Using a detailed graph, determine the breakeven point, assuming the selling price of a product is $100, fixed costs are $8,000, variable costs per unit are $20, and operating income is $32,000
2. How many units would need to be sold to generate a target operating income of $22,000, assuming variable costs are $15 per unit, total fixed costs are $2,000, and the unit selling price is $20 ?
3. Business Process Professionals provides the following ABC cost information:
Activities Total Costs Activity Cost Factors
Account consulting hours $400,000 10,000 hours
Account billing lines $280,000 4,000,000 lines
Account verification accounts $150,000 40,000 accounts
Correspondence letters $50,000 4,000 letters
Total costs $880,000
The above activities are used by its Registration and Investigations Departments as follows:
Recording of Investigations
Account consultation hours 2,000 hours 4,000 hours
Account billing lines 400,000 lines 200,000 lines
Account verification accounts 10,000 accounts 8,000 accounts
Correspondence letters 1,000 letters 1,600 letters
Questions
How much of the account inquiry cost will be allocated to Recording?
How much of the account billing cost will be allocated to Investigations?
How much of the total costs will be allocated to Recording?
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura