1. Compute break-even point in units. Numerator: Denominator: /Contribution margin per unit 1 Fixed costs $ 35,100,000 $ 2. Compute the units of product that must be sold to earn income of $9,000,000. Numerator: I 1 Denominator: 3. Compute the dollar value of sales that must be sold to earn income of $9,000,000. Numerator: 1 1 Denominator: = = 450 = = Break-Even Units Break-even units 78,000 units Units to Achieve Target Units to achieve target 0 units Dollar Value of Sales Dollar value of sales 0
1. Compute break-even point in units. Numerator: Denominator: /Contribution margin per unit 1 Fixed costs $ 35,100,000 $ 2. Compute the units of product that must be sold to earn income of $9,000,000. Numerator: I 1 Denominator: 3. Compute the dollar value of sales that must be sold to earn income of $9,000,000. Numerator: 1 1 Denominator: = = 450 = = Break-Even Units Break-even units 78,000 units Units to Achieve Target Units to achieve target 0 units Dollar Value of Sales Dollar value of sales 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Our team is hired by Apple to help assess whether or not to continue to manufacture and sell an older model of the iPhone. Apple explains that this model continues to sell well in foreign markets but it worries that fixed costs are so large that it is difficult to earn a profit. The tableau dashboard is provided to aid our analysis of this model.
Rent: 10,250,000
Supervisor Salaries: $8,500,000
Office Salaries: $6,000,000
Equipment Depriciation: $5,350,000
Property Taxes: $5,000,000
Battery: $10
Camera: $45
Internal Components: $90
Reciever: $35
Screen: $95
Speaker: $25
Sales Price Per Unit: $750
Transcribed Image Text:1. Compute break-even point in units.
Numerator:
1
Denominator:
/Contribution margin per unit
Fixed costs
$
35,100,000 $
2. Compute the units of product that must be sold to earn income of $9,000,000.
Numerator:
1
1
Denominator:
3. Compute the dollar value of sales that must be sold to earn income of $9,000,000.
Numerator:
1
1
Denominator:
=
=
450 =
=
=
=
Break-Even Units
Break-even units
78,000 units
Units to Achieve Target
Units to achieve target
0 units
Dollar Value of Sales
Dollar value of sales
0
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