Xi-Tech,Inc.is considering the introduction of a new music player with the following price and cost characteristics:
$$\begin{array} { | l | r | l | }
\hline \text { Sales price } & \$ 125 & \text { each } \
\hline \text { Variable costs } & 75 & \text { each } \
\hline \text { Fixed costs } & 180,000 & \text { peryear } \
\hline
\end{array}$$
Required:
(a)How many units must Xi-Techsell to break even?
(b)How many units must Xi-Techsell 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?

Question

Xi-Tech,Inc.is considering the introduction of a new music player with the following price and cost characteristics:
$$\begin{array} { | l | r | l | } 
\hline \text { Sales price } & \$ 125 & \text { each } \
\hline \text { Variable costs } & 75 & \text { each } \
\hline \text { Fixed costs } & 180,000 & \text { peryear } \
\hline
\end{array}$$ 
Required:
(a)How many units must Xi-Techsell to break even?
(b)How many units must Xi-Techsell 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?

Quizplus · Accepted Answer

The Answer of Xi-Tech,Inc.is considering the introduction of a new music player with the following price and cost characteristics:
$$\begin{array} { | l | r | l | } 
\hline \text { Sales price } & \$ 125 & \text { each } \
\hline \text { Variable costs } & 75 & \text { each } \
\hline \text { Fixed costs } & 180,000 & \text { peryear } \
\hline
\end{array}$$ 
Required:
(a)How many units must Xi-Techsell to break even?
(b)How many units must Xi-Techsell 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?

Xi-Tech,Inc Required: (A)How Many Units Must Xi-Techsell to Break Even? (B)How

Xi-Tech,Inc Required:
(A)How Many Units Must Xi-Techsell to Break Even?
(B)How