John Company is a small company that manufactures Led lights. Fixed costs related to led lights are
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Question:
John Company is a small company that manufactures Led lights. Fixed costs related to led lights are $7,000. Variable costs involved in manufacturing costs are $65. The selling price per unit is $100.
Required:
- Define Break- even point.
- Compute break-even point in units. (show the calculation)
- Compute break-even point in dollars (sales). (show the calculation)
- Compute the number of led lights to be sold to earn a profit of $3,500. (show the calculation)
- Suppose that the company decided to manufacture and sell 180 units of led lights. Do you agree with the John Company’s decision or not ?
Related Book For
Managerial accounting
ISBN: 978-0471467854
1st edition
Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin
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