This year Bertrand Company sold 33,000 units of its only product for $18.40 per

Question

This year Bertrand Company sold 33,000 units of its only product for $18.40 per unit. Manufacturing and selling the product required $118,000 of fixed manufacturing costs and $178,000 of fixed selling and administrative costs. Its per unit variable costs follow. Material $ 3.80 Direct labor (paid on the basis of completed units) 2.80 Variable overhead costs 0.38 Variable selling and administrative costs 0.18

Problem 21-6A Part 1 Required: 1. Compute the break-even point in dollar sales for both (a) plan 1 and (b) plan 2. Per unit: Plan 1 Per unit: Plan 2 Per unit Sales ariable Costs Material Direct labor Variable overhead costs Variable S&A; costs Total variable costs Contribution margin Contribution margin % Plan 1 Contribution margin ratio Choose Numerator: Choose Denominator:Contribution margin ratio Contribution margin ratio Break-even point in dollars Choose Numerator: Choose Denominator:Break-even point in dollars Break-even point in dollars Choose Denominator: Plan 2 ontribution margin ratio Contribution margin ratio Break-even point in dollars Break-even point in dollars

Explanation / Answer

units             33,000 per unit $ Total $ Sales $18.40 $607,200 Variable costs Material $3.80 $125,400 Direct Labord $2.80 $92,400 Variable overhead $0.38 $12,540 Variable S&A $0.18 $5,940 Total Variable costs $7.16 $236,280 Contribution margin $11.24 $370,920 Margin % 61% 61% Fixed Costs Manufacturing Costs $118,000 Selling and Admin Costs $178,000 Total Fixed Costs $296,000 Break even units (Fixed costs / Cont per unit)             26,335 Break even $ sales $484,555

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