Break-Even Units: Units for Target Profit Jay-Zee Company makes an in-car navigation system. Next year, Jay-Zee plans to sell 20,000 units at a price of $380 each. Product costs include: Direct materials $80.00 Direct labor $46.00 Variable overhead $11.00 Total fixed factory overhead $705,800 Variable selling expense is a commission of 6 percent of price; fixed selling and administrative expenses total $86,200. Required:

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Break-Even Units: Units for Target Profit

Jay-Zee Company makes an in-car navigation system. Next year, Jay-Zee plans to sell 20,000 units at a price of $380 each. Product costs include:

Direct materials $80.00
Direct labor $46.00
Variable overhead $11.00
Total fixed factory overhead $705,800

Variable selling expense is a commission of 6 percent of price; fixed selling and administrative expenses total $86,200.

Required:

 

### Instructions:

1. **Calculate the sales commission per unit sold.** If required, round your answers to the nearest dollar. Use rounded answers in subsequent computations.
   - $ ___22___ X (multiply) ___ per unit

2. **Calculate the contribution margin per unit.**
   - $ ______ per unit

3. **How many units must Jay-Zee Company sell to break even?** Round your answer to the nearest whole number.
   - ______ units

4. **Feedback:**

---

### Income Statement Preparation:

Prepare an income statement for the calculated number of units. If an amount is zero, enter "0". Do NOT round Break-even units and, if required, round your answer to the nearest dollar.

---

#### Jay-Zee Company  
**Income Statement**

- **Sales** 
  - $ ______ 

- **Less: Variable expenses** 
  - $ ______

- **Contribution margin** 
  - $ ______

- **Less: Fixed expenses** 
  - $ ______

- **Operating income** 
  - $ ______

*Note: The red "X" icons indicate areas where incorrect entries have been made, while green check marks indicate correct entries.*
Transcribed Image Text:### Instructions: 1. **Calculate the sales commission per unit sold.** If required, round your answers to the nearest dollar. Use rounded answers in subsequent computations. - $ ___22___ X (multiply) ___ per unit 2. **Calculate the contribution margin per unit.** - $ ______ per unit 3. **How many units must Jay-Zee Company sell to break even?** Round your answer to the nearest whole number. - ______ units 4. **Feedback:** --- ### Income Statement Preparation: Prepare an income statement for the calculated number of units. If an amount is zero, enter "0". Do NOT round Break-even units and, if required, round your answer to the nearest dollar. --- #### Jay-Zee Company **Income Statement** - **Sales** - $ ______ - **Less: Variable expenses** - $ ______ - **Contribution margin** - $ ______ - **Less: Fixed expenses** - $ ______ - **Operating income** - $ ______ *Note: The red "X" icons indicate areas where incorrect entries have been made, while green check marks indicate correct entries.*
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