Bauer Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales price is $100. Variable costs Manufacturing $ 30 Selling Fixed costs Manufacturing $360,000 Selling and administrative $ 162,000 a. Break-even points in units Break-even points in dollars b. Required Sales in units Required Sales in dollars c. Fixed cost of salaries 12 per unit per unit per year per year Required a. Use the per-unit contribution margin approach to determine the break-even point in units and dollars. b. Use the per-unit contribution margin approach to determine the level of sales in units and dollars required to obtain profit of $232,000. c. Suppose that variable selling costs could be eliminated by employing a salaried sales force. If the company could sell 12,000 units, how much could it pay in salaries for salespeople and still have a profit of $232,000? (Hint: Use the equation method.)
Bauer Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales price is $100. Variable costs Manufacturing $ 30 Selling Fixed costs Manufacturing $360,000 Selling and administrative $ 162,000 a. Break-even points in units Break-even points in dollars b. Required Sales in units Required Sales in dollars c. Fixed cost of salaries 12 per unit per unit per year per year Required a. Use the per-unit contribution margin approach to determine the break-even point in units and dollars. b. Use the per-unit contribution margin approach to determine the level of sales in units and dollars required to obtain profit of $232,000. c. Suppose that variable selling costs could be eliminated by employing a salaried sales force. If the company could sell 12,000 units, how much could it pay in salaries for salespeople and still have a profit of $232,000? (Hint: Use the equation method.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Bauer Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales price
is $100.
Variable costs
Manufacturing
Selling
Fixed costs
$30
12
Manufacturing
$360,000
Selling and administrative $ 162,000
a. Break-even points in units
Break-even points in dollars
b. Required Sales in units
Required Sales in dollars
c. Fixed cost of salaries
per unit
per unit
per year
per year
Required
a. Use the per-unit contribution margin approach to determine the break-even point in units and dollars.
b. Use the per-unit contribution margin approach to determine the level of sales in units and dollars required to obtain
a profit of $232,000.
c. Suppose that variable selling costs could be eliminated by employing a salaried sales force. If the company could sell
12,000 units, how much could it pay in salaries for salespeople and still have a profit of $232,000? (Hint: Use the
equation method.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F974efef4-bbbd-40d5-a47b-e4b02f9a3eba%2F43147261-48d6-4fa0-8832-113214b447bc%2Fayyenek_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Bauer Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales price
is $100.
Variable costs
Manufacturing
Selling
Fixed costs
$30
12
Manufacturing
$360,000
Selling and administrative $ 162,000
a. Break-even points in units
Break-even points in dollars
b. Required Sales in units
Required Sales in dollars
c. Fixed cost of salaries
per unit
per unit
per year
per year
Required
a. Use the per-unit contribution margin approach to determine the break-even point in units and dollars.
b. Use the per-unit contribution margin approach to determine the level of sales in units and dollars required to obtain
a profit of $232,000.
c. Suppose that variable selling costs could be eliminated by employing a salaried sales force. If the company could sell
12,000 units, how much could it pay in salaries for salespeople and still have a profit of $232,000? (Hint: Use the
equation method.)
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