Break-even sales and sales to realize operating income For the current year ended March 31, Cosgrove Company expects fixed costs of $446,200, a unit variable cost of $47, and a unit selling price of $70.
a. Compute the anticipated break-even sales (units) ? units
b. Compute the sales (units) required to realize operating income of $103,500 ? units
Answer :-
A. Break Even Sales ( Units) = Fixed Cost / Contribution Margin per unit
Break Even Sales ( Units) = $446,200 / $70 - $47
Break Even Sales ( Units) = 19,400 Units
B. Sales ( Units) required to realize operating income of $103,500 :-
Sales Required = Target Income + Fixed Cost / Contribution Margin Per Unit
Sales Required = $103,500 + $446,200 / $70 - $47
Sales Required = 23,900 Units
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