Variable cost per unit $20- price $30 total fixed cost $50,000 Expected sales 8000 units- target...

 

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Variable cost per unit $20- price $30 total fixed cost $50,000 Expected sales 8000 units- target profit $20.000 Required: 1. Compute break-even volume and value 2. Compute the quantity of sales that achieve the target profit 3. Compute the safety margin ratio. 4. If the variable cost increases by 20%, what is the effect on break-even volume. 5. If the fixed cost decreases by 20%, what is the effect on break-even volume. Variable cost per unit $20- price $30 total fixed cost $50,000 Expected sales 8000 units- target profit $20.000 Required: 1. Compute break-even volume and value 2. Compute the quantity of sales that achieve the target profit 3. Compute the safety margin ratio. 4. If the variable cost increases by 20%, what is the effect on break-even volume. 5. If the fixed cost decreases by 20%, what is the effect on break-even volume.

Answer rating: 100% (QA)

1 Breakeven volume and value To calculate the breakeven point we need to find the number of units that need to be sold to cover the fixed and variable ... View the full answer