United Shipping Company (USC) is trying to compute its break-even point. It shows the following information for its shipping business.

Variable Cost per unit:

Fixed Costs:

Utility*

Utility*

Direct Materials

              10.50

Rent

       36,000

Direct Labor

                 4.50

Depreciation

       14,000

   Total

    Total

USC has determined that the cost line for Utility Cost is 3x + 12,400 = y.

1.  Complete the above schedule adding in fixed and variable portion of utility cost.  Compute the total of variable cost per unit and total fixed cost. (2 points)

2.  Prepare a C-V-P graph for USC.  Use zero units and 7,000 units.  Compute sales and total cost at those points.

Units

0

7,000

Sales

Total Cost

Include your graph here.  Make sure that it fits nicely on the page. (3 points)

3.  Prepare a profit graph for USC.  Use zero units and 7,000 units.

Units

0

7,000

Profit

Include your graph here.  Make sure that it fits nicely on the page. (2 points)

4.  Using the information computed above, and assuming that the average sales price per unit shipped is $30.00, compute the break-even point in units for USC.  Show computations here: (2 points) 5.  If USC projects that it will be shipping 3,600 units, will it make a profit or loss? (1 point)

Answer rating: 100% (QA)

1 The utility cost function is y 3x 12400 here x is the number of units prod... View the full answer