A Davis Company has fixed costs of USD 625,000 per year and variable costs of USD 7.50 per unit. Its product sells for USD 12.50 per unit. Full capacity is 200,000 units. The contribution margin is USD 5 per unit (USD 12.50 - USD 7.50). a. Compute the break-even point in (1) sales dollars and (2) units. b. Compute the number of units the company must sell if it wishes to have net income of USD 300,000.

A Davis Company has fixed costs of USD 625,000 per year and variable costs of USD 7.50 per unit. Its product sells for USD 12.50 per unit. Full capacity is 200,000 units. The contribution margin is USD 5 per unit (USD 12.50 - USD 7.50). a. Compute the break-even point in (1) sales dollars and (2) units. b. Compute the number of units the company must sell if it wishes to have net income of USD 300,000.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 36P: Faldo Company produces a single product. The projected income statement for the coming year, based...

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A davis company has fixed costs of solve this question general Accounting

A Davis Company has fixed costs of USD 625,000 per year
and variable costs of USD 7.50 per unit. Its product sells for
USD 12.50 per unit. Full capacity is 200,000 units. The
contribution margin is USD 5 per unit (USD 12.50 - USD
7.50).
a. Compute the break-even point in (1) sales dollars and (2)
units.
b. Compute the number of units the company must sell if it
wishes to have net income of USD 300,000.

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