Question

Calculate Break Even when a given profit is required 1. Fixed Costs a. Fixed Factory Overhead...

Calculate Break Even when a given profit is required

1. Fixed Costs a. Fixed Factory Overhead = $1,000,000 b. Fixed Selling overhead = $500,000

2. Variable Costs

a. Variable Manufacturing costs = $1000

b. Variable selling cost per unit = $500

3. Cost Per Unit = $10,000

4. Profit of $250,000 is required ii.

Calculate the CM iii.

Calculate the CM %

Calculate Break Even Point

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Homework Answers

Answer #1
Cost per unit: 10000
Less: VC per unit (1000+500) 1500
Fixed cost per unit 8500
Total fixed cost (1000000+500000): 1500000
Divide: FC per unit 8500
Units sold 177
CM per unit
Total fixed cost 1500000
Total profits 250000
Total Contribution 1750000
Divide: Units sold 177
CM per unit 9887
Selling price = 9887 + 1500 = 11387
CM ratio = CM per unit / Selling price *100
9887/11387 = 86.83%
Break even units:
Fixed cost 1500000
Divide: CM per unit 9887
Break even units: 151.71
Break even in$
Fixed Cost 1500000
divide: CM ratio 86.83%
Break even in$ 1727514
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