The production of a new product required Zion Manufacturing Co. to lease additional plant facilities. Based on studies, the following data have been made available: Estimated annual sales—24,000 units
Selling expenses are expected to be 5% of sales, and net income is to amount to $2.00 per unit.
1. Calculate the selling price per unit. (Hint: Let “X” equal the selling price and express selling expense as a percentage of “X.”)
2. Prepare an absorption costing income statement for the year ended December 31, 2016.
3. Calculate the break-even point expressed in dollars and in units, assuming that administrative expense and factory over- head are all fixed but other costs are fully variable.

  • CreatedMarch 31, 2015
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