PROBLEM 1

Co A produced and sold 40,000 units during January. It incurred the following costs.

Variable cost per unit = $90.00

Total fixed cost = $360,000

Each unit was sold at a price of $120.

1. Calculate the Breakeven point in units
2. Calculate the breakeven point in sales dollars.
3. What is the current profit?
4. How many units should this company produce and sell to earn a profit of $900,000?

PROBLEM 2

ABC Co sells two products, A and B.

Units Selling price Unit variable cost

A 25000 $100 $60

B 75000 $60 $30

The current level of Fixed costs amount to $975,000

1. What is the Weighted Average Contribution Margin?
2. What is the overall Breakeven point in units?
3. How many units of A and of B should be produced and sold at Breakeven?
4. How many total units needed to earn a profit of $2,535,000?
5. Suppose company sold 40,000 units of A and 60,000 units of B. What is the profit?

PROBLEM 3

Bengal Accounting Service is a rapidly growing service.

Accounting produced revenue of $12 million and Tax service produced $18million revenue.

The variable expenses for Accounting Service = $6 million.

The variable expenses for Tax service = $12.0 million.

The company has fixed costs of $7.6million

1. What is the company total break even dollars?
2. At the breakeven point, how much of the revenue is provided by each type of service?