A company manufactures a single product. Budget and standard costs details for the next year include;selling price per unit; $24variable production cost per unit; $8.60fixed production cost; $650,000fixed selling and distribution costs; $230,400sales commission 5% of selling pricesales 90,000 unitsREQUIRED Calculate the break-even point in units Calculate the percentage by which the budgeted sales can fall before the company begins to make a loss. The Marketing Manager has suggested that the selling price per unit can be increased to $25 if the sales commission is increased to 8% of selling price and a further $10,000 is spent on advertising.calculate the revised break-even point based on the marketing manager's suggestion

1. Contribution per unit = $24.00 - $8.60 – $1.20 = $14.20 Break-even point = 88040014.20=62000…

Answered: Calculate the break-even point in units…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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A company manufactures a single product. Budget and standard costs details for the next year include;

selling price per unit; $24

variable production cost per unit; $8.60

fixed production cost; $650,000

fixed selling and distribution costs; $230,400

sales commission 5% of selling price

sales 90,000 units

REQUIRED

Calculate the break-even point in units
Calculate the percentage by which the budgeted sales can fall before the company begins to make a loss. The Marketing Manager has suggested that the selling price per unit can be increased to $25 if the sales commission is increased to 8% of selling price and a further $10,000 is spent on advertising.
calculate the revised break-even point based on the marketing manager's suggestion

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