P3-30. High-Low Cost Estimation and Profit Planning Comparative 2011 and 2012 in
ID: 2446725 • Letter: P
Question
P3-30. High-Low Cost Estimation and Profit Planning Comparative 2011 and 2012 income statements for Dakota Products Inc. follow: DAKOTA PRODUCTS INC. Comparative Income Statements For Years Ending December 31, 2011 and 2012 2011 2012 Unit Sales 5,000 8,000 Sales Revenue $65,000 $104,000 Expenses -70,000 -85,000 Profit (loss) ($5,000) $19,000 Required a. Determine the break-even point in units. b. Determine the unit sales volume required to earn a profit of $10,000. P3-30. High-Low Cost Estimation and Profit Planning Comparative 2011 and 2012 income statements for Dakota Products Inc. follow: DAKOTA PRODUCTS INC. Comparative Income Statements For Years Ending December 31, 2011 and 2012 2011 2012 Unit Sales 5,000 8,000 Sales Revenue $65,000 $104,000 Expenses -70,000 -85,000 Profit (loss) ($5,000) $19,000 Required a. Determine the break-even point in units. b. Determine the unit sales volume required to earn a profit of $10,000.Explanation / Answer
a) Break Even point in Sales units =>
-4.47368421
b) Unit Sales Volume to earn profit of 10,000 =>
7307.692308
2011 2012 Unit Sales 5000 8000 Sales Revenue 65000 104000 Exp -70000 -85000 P/L -5000 19000 Price per unit 65000/5000 104000/8000 13 13 Break Even Sales Units =Total Expenses/ProfitorLoss 14-4.47368421
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