Item 7

Tableau DA 5-2: Exercise, Computing break-even, target income, and margin of safety LO C2

Our team is hired by Apple to help assess whether or not to continue to manufacture and sell an older model of the iPhone. Apple explains that this model continues to sell well in foreign markets but it worries that fixed costs are so large that it is difficult to earn a profit. The Tableau Dashboard is provided to aid our analysis of this model.

Our team is hired by Apple to help assess whether or not to continue to manufacture and sell an older model of the iPhone. Apple explains that this model continues to sell well in foreign markets but it worries that fixed costs are so large that it is difficult to earn profit. The Tableau Dashboard is provided to aid our analysis of this model. Total Fixed Costs Rent Office salaries Equipment depreciation Supervisor salaries Property taxes Variable Costs Per Unit Battery Camera Internal Components Receiver Screen Speaker 10 Sales Price Per Unit Phone Sales Price Per Unit iPhone tableau pe 1. Compute break even point in units Numerator: Denominator: Fred costs Contribution margin perunt 5 24.900 2. Compute the units of product that must be sold to eam income of $9,000,000 Numerator Denominator Break Even Units Break even units unts 7.000 Units to Achieve Target Units to achieve target O units 2. Compute the dollar value at sales that must be sold to earn income of $3,000,000 Numerator Denominator Brak Even Dollars Benvers