You are given this data for a company for two successive periods. Period 6 $300,000 $212,000...

 

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You are given this data for a company for two successive periods. Period 6 $300,000 $212,000 $418,000 10,000 units Materials Labour Overheads Production level Period 7 $360,000 $247,000 $453,000 12,000 units All production is sold for $100 per unit. Estimate the fixed costs and break-even point. It is now proposed to introduce a machine whereby fixed costs will rise by $116,000 and variable costs will fall by $10 per unit. Estimate: (a) the new break-even point, and (b) the sales necessary to maintain profits at $140,000, using the new machine. You are given this data for a company for two successive periods. Period 6 $300,000 $212,000 $418,000 10,000 units Materials Labour Overheads Production level Period 7 $360,000 $247,000 $453,000 12,000 units All production is sold for $100 per unit. Estimate the fixed costs and break-even point. It is now proposed to introduce a machine whereby fixed costs will rise by $116,000 and variable costs will fall by $10 per unit. Estimate: (a) the new break-even point, and (b) the sales necessary to maintain profits at $140,000, using the new machine.

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Solution To estimate the fixed costs and breakeven point we need to first calculate the total cost o... View the full answer