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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.

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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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.

 

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