Question: Johnson, Inc. projects sales for next year will be 60,000 units if the sales price is $28. At this level, fixed costs will be $8

 Johnson, Inc. projects sales for next year will be 60,000 units

Johnson, Inc. projects sales for next year will be 60,000 units if the sales price is $28. At this level, fixed costs will be $8 while total variable costs will be $720,000. The vice president of marketing management to reduce sales price to $26 and to undertake a national advertising campaign costing $10,000. 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 unit must be sold to reach this earnings level? Using the graph on the next page, create a Cost-Volume-Profit graph for the answer to part (b). Label all parts of the graph and show your work

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