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Category > Management Posted 23 Jan 2018 My Price 7.00

Shout Company

35.       CVP analysis with semifixed (step) costs. Shout Company has one product: printing logos on sweatshirts for businesses. The sales price of $20 remains constant per unit regardless of volume, as does the variable cost of $12 per unit. The company is considering operating at one of the following three monthly levels of operations:

 

 

 

Volume Range (production and sales)

 

 

Total Fixed Costs

 

Increase in Fixed Costs from Previous Level

 

 

Level 1 ...........................................

0--10,000

$ 40,000

----

Level 2 ...........................................

10,001--25,000

80,000

$40,000

Level 3 ...........................................

25,001--40,000

100,000

20,000

 

a.       Calculate the break-even point(s) in units.

b.       If the company can sell everything it makes, should it operate at level 1, level 2,  or level 3? Support your answer.

 

Answers

Maurice Tutor
(5)
Status NEW Posted 23 Jan 2018 06:01 PM My Price 7.00

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