CytaTech produces and sells a specialized cordless telephone. The company’s contribution income statement for last month is given below: Sales (20,000 units at €60 per unit) €1,200,000 Variable costs (20,000 units at €45 per unit) (900,000) Contribution margin 300,000 Fixed costs (240,000) NET PROFIT 60,000 Required A) Calculate the break – even point in units AND explain the meaning of your answer. B) Calculate how many units must CytaTech must sell in order to have a net profit of €100,000.
CytaTech produces and sells a specialized cordless telephone. The company’s contribution income statement for last month is given below: Sales (20,000 units at €60 per unit) €1,200,000 Variable costs (20,000 units at €45 per unit) (900,000) Contribution margin 300,000 Fixed costs (240,000) NET PROFIT 60,000 Required A) Calculate the break – even point in units AND explain the meaning of your answer. B) Calculate how many units must CytaTech must sell in order to have a net profit of €100,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
CytaTech produces and sells a specialized cordless telephone.
The company’s contribution income statement for last month is given below:
Sales (20,000 units at €60 per unit) €1,200,000
Variable costs (20,000 units at €45 per unit) (900,000)
Contribution margin 300,000
Fixed costs (240,000)
NET PROFIT 60,000
Required
A) Calculate the break – even point in units AND explain the meaning of your answer.
B) Calculate how many units must CytaTech must sell in order to have a net profit of €100,000.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Includes step-by-step video
Learn your way
Includes step-by-step video
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education