Chrome File Edit View_History Bookmarks PeopleWindow Help 50% CO Fri 11:10 PM a
ID: 2544900 • Letter: C
Question
Chrome File Edit View_History Bookmarks PeopleWindow Help 50% CO Fri 11:10 PM a E d Not Secure | ezto.mheducation.com/hm.tpx Lindon Company is the exclusive distributor for an automotive product that sells for $39.00 per unit and has a CM ratio of 30%. The company's fixed expenses are $210,600 per year. The company plans to sell 19,000 units this year Required 1. What are the variable expenses per unit? (Round your answer to 2 decimal places.) Variable expenses 27.30 per unit 2. Use the equation method: What is the break-even point in unit sales and in dollar sales? (Do not round intermediate calculations.) a. Break-even point in units Break-even point in dollar sales 18,000 702,000 b. What amount of unit sales and dollar sales is required to earn an annual profit of $58,500? (Do not round intermediate calculations.) Sales level in units 23,000 Sales level in dollars897000 16Explanation / Answer
Answer
A
Selling price per unit
39
B
CM ratio
30%
C=AxB
Contribution margin
11.7
D=A-C
Variable cost per unit
$27.3
A
Fixed expense
$210600
B
Contribution margin per unit
11.7
C=A/B
Break Even point in Units
18000
D
Selling price per unit
39
E=CxD
Break Even point in sales dollars
$702000
A
Target annual profit
58500
B
Fixed cost
210600
C=A+B
Total contribution required
$269100
D
Contribution margin per unit
$11.7
E=C/D
Units to sold to earn target profit
23000
F=E x $39
Sales $ required for target profit
$897000
A
Selling price
$39
B
New Variable cost per unit
$23.8
C=A-B
New contribution margin
$15.2
D
Fixed expenses
$210600
E=D/C
Break Even point in Units
$13855
F=E x A
Break Even point in Sales Dollars
$540345
A
Selling price per unit
39
B
CM ratio
30%
C=AxB
Contribution margin
11.7
D=A-C
Variable cost per unit
$27.3
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.