Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit
Question:
Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit of $360. The company’s monthly fixed expenses are $72,000.
A. What is the company’s break-even point in units?
B. What is the company’s break-even point in dollars?
C. Prepare a contribution margin income statement for the month of January when they will sell 500 units.
D. How many units will Kerr need to sell in order to realize a target profit of $120,000?
E. What dollar sales will Kerr need to generate in order to realize a target profit of $120,000?
F. Construct a contribution margin income statement for the month of June that reflects $600,000 in sales revenue for Kerr Manufacturing.
Step by Step Answer:
A To calculate the companys breakeven point in units we divide the total fixed expenses by the contribution margin per unit Breakeven point in units Total fixed expenses Contribution margin per unit C...View the full answer
Principles Of Accounting Volume 2 Managerial Accounting
ISBN: 9780357364802
1st Edition
Authors: OpenStax
