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Paney Company makes and sells calendars. The information on the cost per unit is as follows:...

Paney Company makes and sells calendars. The information on the cost per unit is as follows: Direct materials $1.50 Direct labor 1.20 Variable overhead 0.90 Variable marketing expense 0.40 The fixed marketing expense totaled $13,000, and the fixed administrative expense totaled $35,000. The price per calendar is $10. How many calendars must Paney sell next year to earn an operating income of $24,600? a. 4,100 b. 18,150 c. 12,000 d. 8,000 e. 12,100

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Answer #1

Correct answer----------(e) 12,100

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A Sale price $                  10.00
B variable expense (1.50+1.20+0.90+0.40) $                    4.00
C=A-B Contribution margin $                    6.00
D Fixed expenses plus desired profit (13000+35000+24600) $          72,600.00
E=D/C Break Even point in Unit Sale 12100.00
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