Question

**1) Bears Company sells a product for $15 per unit. The
variable cost is $10 per unit and fixed costs are $1,750,000.
Determine:**

**The Break-Even point in sales units****The Break-Even point if selling price were increased to $655 per unit**

**2) Bear Company sells a product for $15 per unit. The
Variable cost is $10 per unit and fixed costs are $1,750,000.
Determine:**

**The Break-Even Point in sales units****The Sales units required for the company to achieve a target profit of $400,000**

**3)** **Jorgensen Company has sales of
$380,000,000 and the break-even point is sales dollars is
$323,000,000. Determine Jorgensen Company’s margin of safety as a
percent of current sales.**

Answer #1

1) a. break even point in units = fixed cost / contribution margin

= 1,750,000 / 5

= 350,000 units

Contribution margin = selling price - variable cost per unit

= 15 - 10 = 5 per unit

b. break even point in units = fixed cost / contribution margin

= 1,750,000 / 645

= 2,713 units

Contribution margin = selling price - variable cost per unit

= 15 - 10 = 5 per unit

2) a. break even point in units = fixed cost / contribution margin

= 1,750,000 / 5

= 350,000 units

Contribution margin = selling price - variable cost per unit

= 15 - 10 = 5 per unit

b. Required sale = fixed cost + target profit / contribution margin

= 1,750,000 + 400,000 / 5

= 430,000 units

3) margin of safety as % of sale = current sale - break even sale / current sale x 100

= 380,000,000 - 323,000,000 / 380,000,000 x 100

= 15%

Target Profit
Outdoors Company sells a product for $185 per unit. The variable
cost is $70 per unit, and fixed costs are $563,500.
Determine (a) the break-even point in sales units and (b) the
sales units required for the company to achieve a target profit of
$101,430.
a. Break-even point in sales units
units
b. Break-even point in sales units required
for the company to achieve a target profit of $101,430
units

Target Profit
Outdoors Company sells a product for $245 per unit. The variable
cost is $85 per unit, and fixed costs are $1,184,000.
Determine (a) the break-even point in sales units and (b) the
sales units required for the company to achieve a target profit of
$355,200.
a. Break-even point in sales units
units
b. Break-even point in sales units required
for the company to achieve a target profit of $355,200
units

Scrushy Company sells a product for $150 per unit. The variable
cost is $110 per unit, and fixed costs are $200,000.
Determine (a) the break-even point in sales units and (b) the
break-even point in sales units if the company desires a target
profit of $50,000.
a. Break-even point in sales units
b. Break-even point in sales units if the
company desires a target profit of $50,000

Target Profit
Forest Company sells a product for $250 per unit. The variable
cost is $100 per unit, and fixed costs are $615,000.
Determine (a) the break-even point in sales units and (b) the
break-even point in sales units if the company desires a target
profit of $239,850.
a. Break-even point in sales units
units
b. Break-even point in sales units if the
company desires a target profit of $239,850
units

Break-Even Point
Hilton Enterprises sells a product for $115 per unit. The
variable cost is $76 per unit, while fixed costs are $357,435.
Determine (a) the break-even point in sales units and (b) the
break-even point if the selling price were increased to $123 per
unit.
a. Break-even point in sales units
units
b. Break-even point if the selling price were
increased to $123 per unit
units
Target Profit
Trailblazer Company sells a product for $245 per unit. The
variable...

The Waterfall Company sells a product for $150 per unit. The
variable cost is $80 per unit, and fixed costs are $270,000.
Determine the following: Round answers to the nearest whole
number.
a. Break-even point in sales units
units
b. Break-even points in sales units if the
company desires a target profit of $36,000
units

Harmony Company sells a product for $50 per unit. Variable costs
per unit are $30, and monthly fixed costs are $ 150,000.
C. Assume they achieve the level of sales required in part
what is the margin of safety in sales dollars?
Break Even Point in Units: 7500
Level of sales from part b: $12500

Jasmine Inc. sells a product for $60 per unit. Variable costs
per unit are $32, and monthly fixed costs are $210,000.
a. What is the break-even point in
units?
b. What unit sales would be required to earn a
target profit of $159,600?
c. Assume they achieve the level of sales required
in part b, what is the margin of safety in sales dollars?

The DeWayne Company sells binoculars
for $140 per unit. The variable cost is $100 per unit while the
fixed costs
are $1,200,000.
Compute:
The anticipated break-even sales (units) for binoculars.
The sales (units) for binoculars required to realize the target
operating income of $400,000.
Determine the probable operating income (loss) if sales total
of 32,000 units.
If the selling price goes up to $150 per unit while all costs
remain the same, what is the new break-even...

Hilton Enterprises sells a product for $104 per unit. The
variable cost is $69 per unit, while fixed costs are $257,250.
Determine (a) the break-even point in sales units and (b) the
break-even point if the selling price were increased to $111 per
unit.
a. Break-even point in sales units
units
b. Break-even point if the selling price were
increased to $111 per unit
units

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