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

 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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