Access over 20 million homework & study documents

Saturn Game Company manufactures computer games. Last year Saturn sold 25,000 games at $50 each.

Content type
User Generated
Subject
Accounting
Type
Homework
Rating
Showing Page:
1/4

 ! "#
$% &     
 '%()   * 
'   !+   #
&& ,  (-$ #.
/0'1,&  ' 2
3 & 42
!$ 1 
'  '1&2
5$" 1 
 &1 2
$    '(, (  
  #&  , 2

Sign up to view the full document!

lock_open Sign Up
Showing Page:
2/4

 ! "#
$% &     
 '%()   * 
'   !+   #
&& ,  (-$ #.
/0'1,&  ' 2
(
Break-even point in number of units = Fixed cost / Sale price per unit – Variable cost per unit
61,&  ' 7!89 :! ;<
61,&  ' 715,000 units
Working
;= ' 79,!<87!
3 & 42

Sign up to view the full document!

lock_open Sign Up
Showing Page:
3/4

Sign up to view the full document!

lock_open Sign Up
End of Preview - Want to read all 4 pages?
Access Now
Unformatted Attachment Preview
Saturn Game Company manufactures computer games. Last year Saturn sold 25,000 games at $50 each. Total costs amounted to $1,050,000 of which $300,000 were considered fixed. In an attempt to improve its product, the company is considering replacing a component part that has a cost of $5 with a new and better part costing $9 per unit in the coming year. A new machine would also be needed to increase plant capacity. The machine would cost $36,000 with a useful life of six years and no salvage value. The company uses straight-line depreciation on all plant assets. (Ignore income taxes.) 1. What was Saturn Game Company's break-even point in number of units last year? 2. How many units of product would the company have had to sell in the last year to earn $280,000? 3. If management holds the sales price constant and makes the suggested changes, how many units of product must be sold in the coming year to break even? 4. If the firm holds the sales price constant and makes the suggested changes, how many units of product will the company have to sell to make the same net income as last year? 5. If Saturn Game Company wishes to maintain the same contribution-margin ratio, what selling ...
Purchase document to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Anonymous
Really helped me to better understand my coursework. Super recommended.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Similar Documents