Johnson, Inc projects sales for next year will be 55,000 units if the sales price is $27 50 At this level, unit fixed costs will be $8 30 while total variable costs will be $693,000 The vice president of marketing advises management to reduce sales price to $26 00 and to undertake a national advertising campaign costing $12,000 What is the breakeven point for the company in terms of dollars and units before giving effect to the vice president's plan What is the breakeven point in units after giving effect to the plan The vice president believes that his plan will result in a before tax earnings of $56,000 How many units must be sold to reach this earnings level

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Question: Johnson, Inc. projects sales for next year will be 55,000 units if the sales price is $27.50. At this level, unit fixed costs will be

Johnson, Inc. projects sales for next year will be 55,000 units if the sales price is $27.50. At this level, unit fixed costs will be $8.30 while total variable costs will be $693,000. The vice president of marketing advises management to reduce sales price to $26.00 and to undertake a national advertising campaign costing $12,000.

What is the breakeven point for the company in terms of dollars and units before giving effect to the vice president's plan?
What is the breakeven point in units after giving effect to the plan?
The vice president believes that his plan will result in a before tax earnings of $56,000. How many units must be sold to reach this earnings level?

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