Units Sold to Break Even, Unit Variable Cost, Unit Manufacturing Cost, Units to Earn Target Income Belham Company produces and sells disposable foil baking pans to retailers for $3.45 per pan. The variable cost per pan is as follows: Direct materials Direct labor Variable factory overhead Variable selling expense $0.67 0.86 0.63 0.19 Fixed manufacturing cost totals $111,425 per year. Administrative cost (all fixed) totals $48,350. Required: 1. Compute the number of pans that must be sold for Belham to break even. Break-even units 145,250 pans 2. Conceptual Connection: What is the unit variable cost? What is the unit variable manufacturing cost? Round your answers to the neares Unit variable cost Unit variable manufacturing cost Which is used in cost-volume-profit analysis? Unit variable cost 2.35 2.16 3. How many pans must be sold for Belham to earn operating income of $14,3007 545,962. X pans I Unit variable cost 3. How many pans must be sold for Belham to earn operating income of $14,300? 545,962. X pans 4. How much sales revenue must Belham have to earn operating income of $14,300? 137,738 X 5. Suppose that Belham Company could reduce direct labor cost to $0.80 per unit. What is the new break-even point in units? 150,065 X How many units must be sold to earn operating income of $14,300? 146,750 X 6. Suppose that Belham Company's fixed administrative costs increased to $50,000. What is the new break-even point in units? 159,750 X How many units must be sold to earn operating income of $14,300? Feedback Check My Work 1 & 2. Sum all unit variable costs. Classify each unit variable cost as manufacturing cost or period expense. Sum unit variable manufacturing is needed in CVP analysis. 3 & 4. Set up break-even equation with the targeted income. I Multiply units to achieve targeted income by price.