Quantity (EOQ)
Complete the following problems:
- E4-5
- P4-8
- P4-10
- P5-4
- P5-9
E4
- Meeker Company is developing a new product. The selling price has not yet been determined, nor are the variable costs per unit known. The fixed costs are $600,000. Management plans to set the selling price so that variable cost is 55 percent of the selling price.
- A. What is the contribution margin ratio?
- B. What is the breakeven point in dollars?
- C. If management desires a profit of $50,000, what will total sales be?
E5
- Crow, Inc., a not-for-profit company, has a product contribution margin of $40. The fixed costs are $800,000. Crow, Inc., has set a target profit of $35,000 per year.
-
- A. What is the breakeven point in units?
- B. How many units must be sold to achieve the target profit?
- C. If fixed costs decrease 10 percent, how many units must be sold to achieve the target profit?