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What is the breakeven of a fixed cost equal 300000 the price per unit equals 10 and the variable cost per unit equals 7?
Fixed cost = 300000 Contribution margin ratio = (sales - variable cost) / sales Contribution margin ratio = (10 - 7 ) / 10 Contribution margin ratio = .3 breakeven point = 300000 / .3 = 1000000
What is happening to average variable costs when they equal marginal costs?
When average variable costs equal to the average marginal cost, the average variable cost will be at the minimum point. i.e. lowest cost
What are total cost of production examples?
In a perfectly competitive market, all n firms are equal. Thus, the market total cost is the total cost (TC) of one firm multiplied by the amount of n firms in the market Total Market Cost =Variable Costs and fixed costs ...Fixed costs plus variable costs.
If the firm closes down in the short-run total cost will equal zero?
In the short run, if a firm decides to close down, its total variable costs will become zero because it stops production. However, total fixed costs, which include expenses like rent and salaries, will still exist and must be paid, meaning total cost will not equal zero. Therefore, while the firm avoids variable costs, it still incurs fixed costs, resulting in total costs greater than zero.
What is a method of determining at what point total costs equal total revenue?
A method to determine the point at which total costs equal total revenue is to calculate the break-even point. This is done by using the formula: Break-even Point (in units) = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit). At this point, the revenue generated from sales will cover all fixed and variable costs, resulting in neither profit nor loss. Analyzing this helps businesses understand the minimum sales needed to avoid losses.
Does contribution margin equal Sales-variable costs?
Contribution margin is computed as sales revenue minus variable expenses
How do you calculate transfer pricing?
The transfer price should be equal to the variable costs of the goods or services, plus the contribution margin per unit that is lost. =variable costs+(selling price-variable costs)
What is an example of the contribution margin?
For example, if the per-unit variable cost is $15 and selling price per unit is $20, then the contribution margin is equal to $5. The contribution margin may provide a $5 contribution toward the reduction of fixed costs or a $5 contribution to profits.
Produce 60000 variable costs equal 50 percent fixed costs total 120000 what price stero sold to achieve EBIT of 95000?
Breakeven point = Fixed cost + EBIT / contribution margin ratio Contribution margin ratio = sales price - variable cost Contribution margin ratio = 1 - 0.5 = 0.5 or 50% Breakeven point = 215000 / .5 = 430000
What is the break even sales in units if a firm sells units at 40 each variable costs per unit are 10 and total fixed costs equal 120000?
To determine the break even sales in units, divide total fixed costs by the contribution margin per unit. Contribution margin per unit equals sales price less variable costs. Here, contribution margin per unit equals $30 each (i.e. $40 less $10). Total fixed costs equal $120,000. Therefore, the break even sales in units would equal $120,000 / $30 or 40,000 units.
The margin of safety is equal to?
a. sales-net operation incomeb. sales-(variable expenses/contribution margin)c. sales-(fixed expenses/contribution margin ratio)d. sales-(variable expenses + fixed expenses)
What is the break even in units if a firm sells 20000 units at 40 each variable costs per unit are 10 and total fixed costs equal 120000?
1. Breakeven point = fixed cost/ contribution margin ratio contribution margin ratio: (sales - variable cost)/sales Sales = 20000 * 40 = 800000 Less: Variable cost = 20000 * 10 = 200000 Contribution margin = 600000 Contribution margin ratio = 600000/800000 = .75 Breakeven point in dollars = 120000/.75 = $160000 breakeven point in units = 160000 / 40 = 4000
What is the breakeven of a fixed cost equal 300000 the price per unit equals 10 and the variable cost per unit equals 7?
Fixed cost = 300000 Contribution margin ratio = (sales - variable cost) / sales Contribution margin ratio = (10 - 7 ) / 10 Contribution margin ratio = .3 breakeven point = 300000 / .3 = 1000000
When using data from a segmented income statement the dollar sales for the company to break even overall is equal to?
The dollar sales for a company to break even overall, using a segmented income statement, can be calculated by determining the total fixed costs of the company and dividing that by the contribution margin ratio. The contribution margin ratio is derived from the total sales minus variable costs, expressed as a percentage of total sales. Therefore, the break-even sales figure represents the level of sales needed to cover both fixed and variable costs without generating a profit or loss.
What is happening to average variable costs when they equal marginal costs?
When average variable costs equal to the average marginal cost, the average variable cost will be at the minimum point. i.e. lowest cost
Can total revenues and total variable costs be exactly equal?
Yes. Actually this means the company has zero gross profit. If on top of variable costs, there are fixed costs, the company will turn a loss.
What effects the gross profit?
Gross profit or gross margin is equal to:Sales less: Costs of Goods Sold
