**Target Profit**Beard Company sells a product for $15 per unit. The variable cost is $10 per unit, and fixed costs are $1,750,000.Determine:(a) The break-even point in sales units(b) The sales units required for the company to achieve a target profit of $400,000.**a. Break-even point in sales units**[Input Box] units**b. Break-even point in sales units required for the company to achieve a target profit of $400,000**[Input Box] units**Feedback**1. **Check My Work** a. Unit sales price minus unit variable costs equals unit contribution margin. - *Fixed costs divided by unit contribution margin = break-even point in units.* b. (Fixed costs + Target profit) divided by unit contribution margin = sales units.

Name: **Target Profit**Beard Company sells a product for $15 per unit. The
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Description: **Target Profit**Beard Company sells a product for $15 per unit. The variable cost is $10 per unit, and fixed costs are $1,750,000.Determine:(a) The break-even point in sales units(b) The sales units required for the company to achieve a target prof

The Break-even point is the level of sales at which the fixed cost is equal to the contribution margin. In other words, at break-even point of sales the operating profit is zero.(a) Compute the break-even point in units, using the equation as shown below: Break even point=Fixed costSelling price-Variable cost=$1,750,000$15-$10=350,000 units Hence, the break-even point is 350,000 units.(b) Compute the units sold to earn target profit, using the equation as shown below: Target units=Fixed cost+ProfitSelling price-Variable cost=$1,750,000+$400,000$15-$10=430,000 units Hence, the units sold to earn the target profit is 430,000 units.Answer: (a) The break-even point is 350,000 units. (b) The units sold to earn target profit is 430,000 units.

Answered: Beard Company sells a product for $15…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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