181. The Keith Company reports the following data.
6.0 = ($800,000 - $500,000) / ($800,000 - $500,000 - $250,000)
182. The Tom Company reports the following data.
2.0 = ($600,000 - $400,000) / ($600,000 - $400,000 - $100,000)
183. The Dean Company has sales of $500,000, and the break-even point in sales dollars of $300,000. Determine the company’s margin of safety percentage.
40% = ($500,000 - $300,000)/$500,000
184. The Grant Company has sales of sales of $300,000, and the break-even point in sales dollars if $210,000. Determine the company’s margin of safety percentage.
30% = ($300,000 - $210,000)/$300,000
185. Blane Company has the following data:
Total Sales$800,000
Total Variable Costs$300,000
Fixed Costs$200,000
Units sold50,000 units
What will operating income be if units sold double to 100,000 units?
186. Douglas Company has a contribution margin ratio of 30%. If Douglas has $336,420 in fixed costs, what amount of sales will need to be generated in order for the company to break even?
187. Racer Industries has fixed costs of $900,000. Selling price per unit is $250 and variable cost per unit is $130.
Required:
a. How many units must Racer sell in order to break even?
b. How many units must Racer sell in order to earn a profit of $480,000?
c. A new employee suggests that Racer Industries sponsor a company 10-K as a form of advertising. The cost to sponsor the event is $7,200. How many more units must be sold to cover this cost?
a. $900,000 / ($250 – 130) = 7,500 units
b. ($900,000 + 480,000) / ($250 – 130) = 11,500 units
c. $7,200 / ($250 – 130) = 60 units
188. Global Publishers has collected the following data for recent months:
Month Issues Published Total Cost
March 20,500 $20,960
April 21,800 22,464
May 17,750 18,495
June 21,200 21,395
Required:
a. Using the high-low method, find variable cost per unit, total fixed costs, and the total cost equation.
b. What is the estimated cost for a month in which 19,000 issues are published?
189. Trail Bikes, Inc. sells three Deluxe bikes for every seven Standard bikes. The Deluxe bike sells for $1,800 and has variable costs of $1,200. The Standard bike sells for $600 and has variable costs of $200.
Required:
a. If Trail Bikes has fixed costs that total $1,702,000, how many bikes must be sold in order for the company to break even?
b. How many of these bikes will be Deluxe bikes and how many will be the Standard bikes?
190. If a business had a capacity of $10,000,000 of sales, actual sales of $6,000,000, break-even sales of $4,500,000, fixed costs of $1,800,000, and variable costs of 60% of sales, what is the margin of safety expressed as a percentage of sales?