Picnic Time produces a picnic basket that is sold for $$100$ per unit. Assume the company produced and sold $4,000$ baskets during July. There were no beginning or ending inventories. Variable and fixed costs follow.

Variable Cost per Unit Fixed Costs per Month

Manufacturing: Manufacturing overhead $$36,000$

Direct materials. $$25$ Selling and administrative $68,000$

Direct labor $15$ Total $$104,000$

Manufacturing overhead $5$ $$45$

Selling and administrative $4$

Total $$49$

b$.$ Determine the break$-$even point in sales dollars.

Note: Do not round intermediate calculations

Note: Round up to the nearest dollar, enter $$80$ for $$79\mathrm{.}2$

$Answer

c$.$ Suppose the cost of labor is expected to increase next year. How will this affect the

break$-$even point?

Break$-$even point will Answer

d$.$ Determine July's margin of safety in sales dollars.

$Answer

e$.$ What dollar sales volume is currently required to obtain a before$-$tax profit of $$120,000?$

Note: Do not round intermediate calculations

Note: Round up to the nearest dollar, enter $$80$ for $$79\mathrm{.}2$

$Answer

Answer rating: 100% (QA)

b To determine the breakeven point in sales dollars we need to calculate the total fixed costs and t... View the full answer