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Diamond Toaster Company Volume analysis Selling Price Per toaster 350 Material Cost Per toaster 210 Salary...

Diamond Toaster Company Volume analysis Selling Price Per toaster 350 Material Cost Per toaster 210 Salary Expense for 2011 250,000 Utilities Expense for 2011 40,000 All Other Annual Fixed Costs for 2011 80,000 Sales Commission per toaster 30 ?? How many units to we need to sell in 2011 to breakeven ?? How many units to we need to sell in 2011 to make $1,500,000

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Answer #1
Answer 1
Break even units for 2011 = Fixed Cost / Contribution Margin per unit
Fixed Cost = Salary Expense + Utilities Expense + Other Annual Fixed Costs = $250000 + $40000 + $80000 = $3,70,000
Contribution Margin per unit = Selling Price Per toaster - Material Cost Per toaster - Sales Commission per toaster = $350 - $210 - $30 = $110 per unit
Break even units for 2011 = $370000 / $110 = 3364 units
Answer 2
No.of units need to be sold to make $15,00,000
No.of units need to be sold to make profit = [Fixed Expenses + Profit] / Contribution Margin per unit
No.of units need to be sold to make $15,00,000 = [$370000 + $1500000] / $110 = 17000 units
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