please answer ASAP.. *only last part with a \"RED X\"* 17 Lindon Company is the
ID: 2529647 • Letter: P
Question
please answer ASAP.. *only last part with a "RED X"*
17 Lindon Company is the exclusive distributor for an automotive product that sells for $32.00 per unit and has a CM ratio of 30%. The company's fixed expenses are $177600 per year. The company plans to sell 20,900 units this year 0.72 points Required 1. What are the variable expenses per unit? 2. What is the break-even point in unit sales and in dollar sales? 44242 3. What amount of unit sales and dollar sales is required to attain a target profit of $81,600 per year? 4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $3.20 per unit. What is the company's new break-even point in unit sales and in dollar sales? Answer is complete but not entirely correct. S 22.40 18,500 S 592,000 27,000 $ 864,000 13,875 $ 444,000 $ 864,000 1. Variable expense per unt 2. Break-even point in units Break-even point in dollar sales 3. Unit sales needed to attain target profit Dollar sales needed to attain target profift 4.New break-even point in unit sales New break-even point in dollar sales Dollar sales needed to attain target profitExplanation / Answer
Answer Part 4 ( As you stateted - thats the only requirement)
Old Variable cost per unit = $32 * 70 % = $22.40
Revised variable cost per unit = $22.40 - $3.20 = $19.20
Revised Cotribution per unit = Selling Price - Revised variable cost = $32 - $19.20 = $12.80
Target profit = $81,600
Target Contribution = Target profit + Annual Fixed Cost = $81,600 + $177,600 = $259,200
Units to sale for attaining target profit = Target Contribution / Revised Cotribution per unit
= $259,200 / $12.80 = 20,250 units
Dollar sales needed to attain target profit = Units to sale * Selling price per unit
= 20,250 units * $32 = $648,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.