94. Cool Shades, Inc. (CSI) manufactures biotech sunglasses. The variable materials cost is $1.69 per unit, and the variable labor cost is $3.04 per unit. Suppose the firm incurs fixed costs of $750,000 during a year in which total production is 450,000 units and the selling price is $11.50 per unit. What is the cash break-even point?

A. 76,453 units

B. 88,652 units

C. 110,783 units

D. 128,907 units

E. 140,768 units

QCash Break-even = $750,000/($11.50 - $1.69 - $3.04) = 110,783 units

AACSB: Analytic

Bloom's: Application

Difficulty: Basic

EOC #: 11-1

Learning Objective: 11-3

Section: 11.4

Topic: Cash break-even

95. Mountain Gear can manufacture mountain climbing shoes for $14.95 per pair in variable raw material costs and $18.46 per paid in variable labor costs. The shoes sell for $127 per pair. Last year, production was 170,000 pairs and fixed costs were $830,000. What is the minimum acceptable total revenue the company should accept for a one-time order for an extra 10,000 pairs?

A. $149,500

B. $287,600

C. $334,100

D. $380,211

E. $1,164,100

Marginal total revenue = 10,000 ( ($14.95 + $18.46) = $334,100

AACSB: Analytic

Bloom's: Application

Difficulty: Basic

EOC #: 11-2

Learning Objective: 11-3

Section: 11.3

Topic: Marginal cost

96. We are evaluating a project that costs $854,000, has a 15-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 154,000 units per year. Price per unit is $41, variable cost per unit is $20, and fixed costs are $865,102 per year. The tax rate is 33 percent, and we require a 14 percent return on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within (14 percent. What is the worst-case NPV?

A. $984,613

B. $1,267,008

C. $1,489,511

D. $1,782,409

E. $1,993,870

OCFWorst = {[($41 ( 0.86) - ($20 ( 1.14)][154,000 ( 0.86] -...