Question: Answer the following question(s) using the information below. Burger Bob's Boathouse sells only one product. 7,000 units were sold In year resulting in $70,000 of

Answer the following question(s) using the information below.

Burger Bob's Boathouse sells only one product. 7,000 units were sold In year resulting in $70,000 of sales revenue. Variable costs were $28,000 for the year, and fixed costs were $12,000.

4.Contribution margin per unit is

a.$4.00

b.$4.29

c.$6.00

d.$10.00

e.$5.71

5.Break-even point in volume is

a.2,000 units.

b.3,000 units.

c.5,000 units.

d.7,000 units.

e.2,797 units.

6.The number of units required to be sold to achieve $60,000 of operating profit is

a.10,000 units.

b.11,666 units.

c.15,000 units.

d.18,000 units.

e.12,000 units.

Short Answer

Julia Child Company sells baby car seats to retailers for an average of $85 each. The variable cost of each car seat is $48 and monthly fixed selling costs total $6,000. Other monthly fixed costs of the company total $7,000.

Required:

7.What is the breakeven point in number of car seats?

8.What is the margin of safety, assuming sales total $32,000?

9.What is the breakeven level in car seats, assuming variable costs increase by 20%?

10.What is the breakeven level in car seats, assuming the selling price goes up by 10%, fixed selling costs decline by 10%, and other fixed costs decline by $1,000?

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