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contribution margin per unit.

contribution margin per unit.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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:

 

1. Calculate the sales commission per unit sold. If required, round your answers to the nearest dollar. Use rounded answers in subsequent computations. $23 ✓ per unit Calculate the contribution margin per unit. $220 ✓ per unit 2. How many units must Jay-Zee Company sell to break even? Round your answer to the nearest whole number. 3,600 ✓ units --- Feedback Prepare an income statement for the calculated number of units. If an amount is zero, enter "0". Do NOT round Break-even units and, if required, round your answer to the nearest dollar. **Jay-Zee Company Income Statement** - **Sales** - _____________$ - **Less: Variable expenses** ✓ - _____________$ - **Contribution margin** ✓ - _____________$ - **Less: Fixed expenses** ✓ - _____________$ - **Operating income** ✓ - _____________$
Transcribed Image Text:1. Calculate the sales commission per unit sold. If required, round your answers to the nearest dollar. Use rounded answers in subsequent computations. $23 ✓ per unit Calculate the contribution margin per unit. $220 ✓ per unit 2. How many units must Jay-Zee Company sell to break even? Round your answer to the nearest whole number. 3,600 ✓ units --- Feedback Prepare an income statement for the calculated number of units. If an amount is zero, enter "0". Do NOT round Break-even units and, if required, round your answer to the nearest dollar. **Jay-Zee Company Income Statement** - **Sales** - _____________$ - **Less: Variable expenses** ✓ - _____________$ - **Contribution margin** ✓ - _____________$ - **Less: Fixed expenses** ✓ - _____________$ - **Operating income** ✓ - _____________$
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