Question

# Kruger Corporation produces products that it sells for \$19 each. Variable costs per unit are \$8,...

Kruger Corporation produces products that it sells for \$19 each. Variable costs per unit are \$8, and annual fixed costs are \$233,200. Kruger desires to earn a profit of \$33,000.

 Required: a. Use the equation method to determine the break-even point in units and dollars.

Break-even point in units:

Break-even point in dollars:

 b. Determine the sales volume in units and dollars required to earn the desired profit. Sales Volume in units: Sales in dollars:

a) Sales = Variable cost+Fixed cost+Profits

19X = 8X+233200+0

11X = 233200

X(Break even point unit) = 21200 units

Sales = Variable cost+Fixed cost+Profit

= (21200*8)+233200

Sales = 402800

Break even sales = \$402800

b) Sales = Variable cost+Fixed cost+Profits

19X = 8X+233200+33000

11X = 266200

X(Sales volume in unit) = 24200 units

Sales = Variable cost+Fixed cost+Profit

= (24200*8)+233200+33000

Sales = 459800

Sales in dollars = \$49800

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