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Xi-Tech, Inc Required:
(A) How Many Units Must Xi-Tech Sell to Break

question 51

Essay

Xi-Tech, Inc. is considering the introduction of a new music player with the following price and cost characteristics:
 Sales price $125 each  Variable costs 75 each  Fixed costs 180,00 per year \begin{array} { l c } \text { Sales price } & \$ 125 \text { each } \\\text { Variable costs } & 75 \text { each } \\\text { Fixed costs } & 180,00 \text { per year }\end{array}
Required:
(a) How many units must Xi-Tech sell to break even?
(b) How many units must Xi-Tech sell to make an operating profit of $120,000 for the year?
(c) If projected sales are 7,500 units, what is the margin of safety in units?


Definitions:

Company's Strategy

A detailed plan outlining how a business intends to achieve its goals and improve its competitive position in the market.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a specific period.

Beginning Inventory

The initial quantity of goods available for sale at the start of an accounting period.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated by adding purchases to beginning inventory and subtracting sold goods.

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