Alex Miller,Inc

question 189

Essay

Alex Miller,Inc.,sells car batteries to service stations for an average of $30 each.The variable cost of each battery is $20 and monthly fixed manufacturing costs total $10,000.Other monthly fixed costs of the company total $8,000.
Required:
a.What is the breakeven point in batteries?
b.What is the margin of safety,assuming sales total $60,000?
c.What is the breakeven level in batteries,assuming variable costs increase by 20%?
d.What is the breakeven level in batteries,assuming the selling price goes up by 10%,fixed manufacturing costs decline by 10%,and other fixed costs decline by $100?

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Definitions:

Punishment

A method used to enforce discipline or impose a penalty for violating laws or rules, ranging from fines to imprisonment.

First Continental Congress

A meeting in 1774 of delegates from twelve of the thirteen American colonies to address grievances against British policies and to organize colonial resistance.

Coercive Acts

A series of four acts passed by the British Parliament in 1774 to punish Massachusetts colonists for the Boston Tea Party, leading to greater unity among the American colonies against Britain.

Independence

The state of being free from external control and constraint, often referring to a nation's sovereignty and the right to self-governance.