Question

# Breed Products has performed extensive studies on its costs and production and estimates the following annual...

Breed Products has performed extensive studies on its costs and production and estimates the following annual costs based on 151,000 units (produced and sold):

 Total Annual Costs (151,000 units) Direct material \$ 298,000 Direct labor 258,000 Manufacturing overhead 209,000 Selling, general, and administrative 149,000 Total \$ 914,000

Required:

a. Compute Breed’s unit selling price that will yield a profit of \$596,000, given sales of 151,000 units. (Round your answer to 2 decimal places.)

b. Compute Breed’s dollar sales that will yield a projected 26 percent profit on sales, assuming variable costs per unit are 54 percent of the selling price per unit and fixed costs are \$424,000.

c. Management believes that a selling price of \$7.60 per unit is reasonable given current market conditions. How many units must Breed sell to generate the revenues (dollar sales) determined in requirement (b)? (Round your final answer to nearest whole unit.)

#### Homework Answers

Answer #1
 Req a: Total cost of 151000 units 914000 Add: Desired profits 596000 Target sales in \$ 1510000 Divide: Number of units 151000 Unit Sellig price 10 Req b: Fixed cost: 424000 Variable cost % of sales 54% Profit % of sales 26% Remaining % on sales for Fixed cost 20% (100-54-26) Total saless in \$: 424000 /20 *100 = \$ 2120,000 Req c: Total Sales revenue required 2120000 Divide: Selling price 7.6 Sales units required 278948 units
Know the answer?
Your Answer:

#### Post as a guest

Your Name:

What's your source?

#### Earn Coins

Coins can be redeemed for fabulous gifts.

##### Not the answer you're looking for?
Ask your own homework help question
ADVERTISEMENT
##### Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

ADVERTISEMENT