Sultan Corporation operated at its normal capacity during the current year, producing 60,000 units of its single
Question:
Sultan Corporation operated at its normal capacity during the current year, producing 60,000 units of its single product. Sales totalled 50,000 units at an average price of $30 per unit. Variable cost of goods sold amounted to $10 per unit, and sales commissions were paid out at $5 per unit sold. Fixed product costs, incurred uniformly throughout the year, amounted to $208,000 and fixed period costs, incurred uniformly, amounted to $18,000 per quarter.
Required:
1. Compute Sultan’s break-even point in sales dollars for the current year.
2. If Sultan’s fixed product costs unexpectedly increase by 10%, what is the new unit selling price that would yield the same break-even sales as before the cost increase (rounded to the nearest dollar)?
CorporationA Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
Introduction to Managerial Accounting
ISBN: 978-1259105708
5th Canadian edition
Authors: Peter C. Brewer, Ray H. Garrison, Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan