Problems
1Ann Page Co.
fixed costs $30,000 per year. Variable costs per unit are $17. Sales price per unit is $30.
a)What is the contribution margin of the product?
Answer:$13.00Contribution margin is unit sales price less unit variable cost.
b)Calculate the breakeven point in unit sales and dollars.
Answer:Breakeven in units is2,308
Breakeven in dollars =$69,240.00
c)What is the operating profit (loss) at:
i) 1,500 units per year?
Answer:-$10,500
ii) 3,600 units per year?
Answer:$16,800
d)Plot a breakeven chart using the foregoing figures.
2Mrs. Jones owns 100 shares of stock in Daimler-Benz valued at 16.5 Euros per share. What is the value in $U.S. of her stock if:
a)0.90 = $1
Answer:Value of 100 shares at 16.5 per share1,650.00Euros
Value of1,650.00Euros at0.90 = $1 is$1,833.33
b)0.70 = $1
Answer:Value of1,650.00Euros at0.70 = $1 is$2,357.14
c)1.20 = $1
Answer:Value of1,650.00Euros at1.20 = $1 is$1,375.00
3John is planning on purchasing his German dream car for65,000Euros
How much does he need in $U.S. if there are0.98Euros to the $U.S.?
Answer:Value of65,000Euros at0.98 = $1 is$66,326.53
