Question: Chloe Enterprises operates a single-product entity. Data relating to the product for 2012 were as follows. Required: a. Calculate the break-even units for 2012. b.

Chloe Enterprises operates a single-product entity. Data relating to the product for 2012 were as follows.

Required:
a. Calculate the break-even units for 2012.
b. Calculate the margin of safety in both units and dollars.
c. Calculate the profit achieved in 2012.
d. Changes in marketing strategy are planned for 2013. This would increase variable marketing and distribution costs by $4 per unit, and reduce fixed non-manufacturing costs by $80 000 per year.
Calculate the units that would need to be sold in 2013 to achieve the same profit as in 2012.
e. Would you recommend the change? Explain.

Annual volume Selling price per unit Variable manufacturing cost per unit Annual fixed manufacturing costs Variable marketing and distribution costs per unit Annual fixed non-manufacturing costs 32 000 units $60 28 120 000 12 360 000

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