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Sormac Corporation manufactures and sells hand radios.  Price and cost data are as follows: Selling price per...

Sormac Corporation manufactures and sells hand radios.  Price and cost data are as follows:

Selling price per unit

$30.00

Variable cost per unit

    Direct material

$9.80

    Direct labor

$4.80

    Manufacturing overhead

$7.20

    Selling expenses

$1.90

            Total Variable Cost per Unit

$23.70

Annual fixed cost

    Manufacturing overhead

$96,800

    Selling and administrative

$42,400

Total Fixed Cost

    $139,200

Forecasted annual sales volume (168,000 units)
  1. What is Sormac Corporation break-even point in units?
  2. What is the company’s break-even point in sales dollars?
  3. How many units Sormac Corporation have to sell in order to earn $168,000.
  1. Management estimates that direct labor costs will increase by 20% next year but Manufacturing overhead annual fixed cost will be reduced to $79,300. How many units will the company have to sell to reach its break-even point?
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