Answer:
1. 600 units
2. $81,800
Explanation:
In this question we use the formula of break-even point in unit sales which is shown below:
= (Fixed expenses + target profit) ÷ (Contribution margin per unit)
where,
Contribution margin per unit = Selling price per unit - Variable expense per unit
= $134 - $67
= $67
And, the other items values would remain the same
Now put these values to the above formula
So, the value would equal to
= ($32,300 + $7,900) ÷ ($67)
= ($402,00) ÷ ($67)
= 600 units
2. Break even point = (Fixed expenses + desired profit) ÷ (Profit volume Ratio)
And, Profit volume ratio = (Contribution margin per unit) ÷ (selling price per unit) × 100
So, the Profit volume ratio = ($67) ÷ ($134) × 100 = 50%
The other values would remain same
Now put these values to the above formula
So, the value would equal to
= ($32,300 + $8,600) ÷ (50%)
= $81,800
