Question

Executives of the Carrot Watch, Inc. (which produces Apple Watch knock-offs) produced the latest watch which is now ready for distribution. Carrot Watch sells to a wholesaler who then sells to retailers and ultimately end consumers. The following cost information is needed to answer the questions below for Carrot Watch, Inc.:

Carrot Watch packaging (direct material and labor)	$1.25/each
Carrot Watch raw materials for production	$4.95/each
Software on watch	$12.85/each
Rent and Fixed Salaries	$275,000
General overhead	$250,000
Selling price to distributor	$42.00

                                               

Calculate the following:

1. Break-even volume in units and dollars

2. Necessary unit volume to achieve a $200,000 profit

Answer 1

The final answer is rounded.