Answer:
1. $30,80
2. 21,500 units and $946,000
3. 33,000 units and $1,452,000
4. 16,125 units and $709,500 , $1,089,000
Explanation:
<u>The variable expenses per unit</u>
First determine the variable expenses ratio
Variable expenses ratio = 1 - CM ratio
= 1-0.30
= 0.70
Variable expenses per unit = $44.00 ×0.70
= $30,80
<u>Break-even point in unit sales and in dollar sales</u>
break-even point in unit sales = Fixed Costs / Contribution per Unit
= $283,800/ ($44.00×30%)
= $283,800/$13.20
= 21,500
break-even point in in dollar sales = Fixed Costs / Contribution Margin Ratio
= $283,800/0.30
= $946,000
<u>Amount of unit sales and dollar sales is required to attain a target profit of $151,800 per year</u>
Target Sales (Unit Sales) = Fixed Costs + Target Profit / Contribution per Unit
= ($283,800 + $151,800) / $13.20
= 33,000
Target Sales (Dollar Sales) = Fixed Costs + Target Profit / Contribution Margin Ratio
= ($283,800 + $151,800) / 0.30
= $1,452,000
<u>the company’s new break-even point in unit sales and in dollar sales</u>
break-even point in unit sales = Fixed Costs / Contribution per Unit
= $283,800/ ($44.00-$30,80+$4.40)
= $283,800/$17,60
= 16,125
break-even point in in dollar sales = Fixed Costs / Contribution Margin Ratio
= $283,800/($17,60/$44.00)
= $283,800/0.40
= $709,500
<u>dollar sales is required to attain a target profit of $151,800</u>
Target Sales (Dollar Sales) = Fixed Costs + Target Profit / Contribution Margin Ratio
= ($283,800 + $151,800) / 0.40
= $1,089,000
