Lindon Company is the exclusive distributor for an automotive product that sells for $40 per unit and
Fantastic news! We've Found the answer you've been seeking!
Question:
Lindon Company is the exclusive distributor for an automotive product that sells for $40 per unit and has a CM ratio of 30%.
The company\'s fixed expenses are $180,000 per year.
The company plans to sell 16,000 units this year.
1. What are the variable expenses per unit?
Variable expenses | per unit |
2. Use the equation method:
a. What is the break-even point in unit sales and in dollar sales?
Break-even point in unit sales | |
Break-even point in dollar sales |
b. What amount of unit sales and dollar sales is required to earn an annual profit of $60,000?
Sales level in units | |
Sales level in dollars |
c. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $4 per unit. What is the company\'s new break-even point in unit sales and in dollar sales?
New break-even point in unit sales | |
New break-even point in dollar sales |
Related Book For
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date: