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# Finance Questions

• From Mathematics, General Mathematics
• Due on 13 Jun, 2018 12:00:00
• Asked On 14 Jun, 2018 02:04:24
• Due date has already passed, but you can still post solutions.
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12. Given the following information, what is the company’s cash break-even point?

Revenue

\$ 3,700,000

Total variable costs

\$ 2,300,000

Total fixed costs

\$ 1,100,000, including depreciation

Depreciation

\$ 100,000

Answer \$ 2,642,857

14. Given the following information, what is the PV ratio?

Variable cost per unit

\$100

Unit selling price per unit

\$200

Answer 0.50

16. Given the following information, what is the contribution margin?

Revenue

\$1,000,000

Direct material

500,000

Direct labour

250,000

Manufacturing overhead

150,000

Administration overhead

50,000

Answer \$ 250,000

17. An entrepreneur is absolutely certain his new company will sell 10,000 units. He has already determined the break-even point is 3,000 units. Should he launch the company, and why or why not?

Launch the company because there is little risk since the break-even point is well below expected sales.

18. A company wants to make a \$10,000 profit by selling 500 units, without changing the selling price. By how much should the fixed costs be reduced?

Selling price per unit

\$300

Variable cost per unit

\$100

Total fixed costs

\$100,000

Answer \$  10,000

19. Given the following information, what is the required number of units that must be sold?

Selling price per unit

\$300

Variable cost per unit

\$100

Total fixed costs

\$100,000

Profit objective

\$10,000

Answer 550 units

20. When is the profit break-even point achieved?  When the contribution margin covers all costs and the profit objective.

21. How is the contribution margin calculated?

by subtracting variable costs from revenue

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## [Solved] solution to the questions

• This solution is not purchased yet.
• Submitted On 14 Jun, 2018 09:34:34
Answer posted by
Question 12. The company’s cash break-even point Cash Break- Even Point (in sales) = Cash Fixed Cost/Cash Contribution ratio Cash fixed cost = total fixed cost - depreciation =\$ 1,100,000 - \$ 100,000 = \$1,000,000 cash contribution margin ratio = (Revenues-variable costs)/Revenues = (\$ 3,700,000-\$2,300,000)/\$3,700,000 = 0.378378378 Cash break-even point = \$1,000,000/0.378378378 = \$ 2,642,857.143 Therefore, the answer \$ 2,642,857 ...
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