Break-Even Analysis There are several formulas that will be helpful for this assignment: • break-even units = fixed expenses/ (price- variable cost) • break-even price = variable cost + fixed expenses / projected units • price (target return on sales) = break-even price/(1- target return on sales %) Use the following data for answering the questions: Item Unit Cost Advertising Consumer Promotion Personal Selling Dealer Promotion Allocated Product Development Costs for Region $26 $1,600,000 $1,500,000 6 salespeople @ $80,000 each $1,000,000 Value $600,000 QUESTION 3 What is the break-even price for expected sales of 230,000 units? Round to the nearest penny.
Break-Even Analysis There are several formulas that will be helpful for this assignment: • break-even units = fixed expenses/ (price- variable cost) • break-even price = variable cost + fixed expenses / projected units • price (target return on sales) = break-even price/(1- target return on sales %) Use the following data for answering the questions: Item Unit Cost Advertising Consumer Promotion Personal Selling Dealer Promotion Allocated Product Development Costs for Region $26 $1,600,000 $1,500,000 6 salespeople @ $80,000 each $1,000,000 Value $600,000 QUESTION 3 What is the break-even price for expected sales of 230,000 units? Round to the nearest penny.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Break-Even Analysis
There are several formulas that will be helpful for this assignment:
• break-even units =
fixed expenses/ (price - variable cost)
• break-even price = variable cost + fixed expenses / projected units
• price (target return on sales) = break-even price/(1-target return on sales %)
Use the following data for answering the questions:
Item
Unit Cost
Advertising
Consumer Promotion
Personal Selling
Dealer Promotion
Allocated Product Development Costs for Region
$26
$1,600,000
$1,500,000
Value
6 salespeople @ $80,000 each
$1,000,000
$600,000
QUESTION 3
What is the break-even price for expected sales of 230,000 units? Round to the nearest penny.
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