Target Profit Versa Inc. sells a product for $100 per unit. The variable cost is

Question

Target Profit

Versa Inc. sells a product for $100 per unit. The variable cost is $75 per unit, and fixed costs are $45,000.

Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of $25,000.

Break-Even Point

Elrod Inc. sells a product for $75 per unit. The variable cost is $45 per unit, while fixed costs are $48,000.

Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $95 per unit.

Break-Even Point

Santana sells a product for $115 per unit. The variable cost is $75 per unit, while fixed costs are $65,000.

Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $125 per unit.

a. Break-even point in sales units units b. Break-even point in sales units if the company desires a target profit of $25,000 units

Explanation / Answer

ANS) VERSA INC. Selling Price 100 Per unit Variable Cost 75 Per unit Contribution Margin 25 Per unit Fixed Cost 45000 a Break Even Point in Sales(Units) Fixed Cost/Contribution Margin Per unit 1800 Units b Break Even Point in Sales (Units) (Fixed Cost+Target Profit)/Contribution Margin Per unit 2800 Units ELROD INC. Selling Price 75 Per Unit Variable Cost 45 Per Unit Contribution Margin 30 Per Unit Fixed Cost 48000 a Break Even Point in Sales(Units) Fixed Cost/Contribution Margin Per unit 1600 Units b Selling Price 95 Per Unit Variable Cost 45 Per Unit Contribution Margin 50 Per Unit Fixed Cost 48000 Break Even Point in Sales(Units) Fixed Cost/Contribution Margin Per unit 960 Units SANTANA SALES Selling Price 115 Per Unit Variable Cost 75 Per Unit Contribution Margin 40 Per Unit Fixed Cost 65000 a Break Even Point in Sales(Units) Fixed Cost/Contribution Margin Per unit 1625 Units b Selling Price 125 Per Unit Variable Cost 75 Per Unit Contribution Margin 50 Per Unit Fixed Cost 65000 Break Even Point in Sales(Units) Fixed Cost/Contribution Margin Per unit 1300 Units

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