Haas Company manufactures and sells one product. The following information perta

Question

Haas Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead $29 $21 $9 $3 Variable selling and administrative Flxed costs per year Foxed manufacturing overhead Fixed selling and administrative expenses $420,000 $ 180,000 During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations. it produod 75,000 units and sold 50,000 units. In its third year, Haas produced 40.000 units and sold 65,000 units. The selling price of the company's product is $72 per unt. Required: 1. Compute the company's break-even point in units sold. 2. Assume the company usos variable cosing a. Compule the unit product cont for yoar 1, year 2, and year 3 Unit prodkuct cost

Explanation / Answer

Ans-

2 a

2 (b)

3 a

3 b

Detail Units Per unit($) Total Selling Price                                       1                                                             60,000                      72      4,320,000 Variable Cost                                       2                                                             60,000                      62      3,720,000 Contribution Margin 3(2-1)                      10          600,000 Fixed Cost                                      4          600,000

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