Lindon Company is the exclusive distributor for an automotive product that sells for $32.00 per unitand has a CM ratio of 30%. The company's fixed expenses are $177,600 per year. The company plansto sell 20,900 units this year.Required:1. What are the variable expenses per unit? (Round your "per unit" answer to 2 decimal places.)2. What is the break-even point in unit sales and in dollar sales?3. What amount of unit sales and dollar sales is required to attain a target profit of $81,600 per year?4. Assume that by using a more efficient shipper, the company is able to reduce its variable expensesby $3.20 per unit. What is the company's new break-even point in unit sales and in dollar sales? Whatdollar sales is required to attain a target profit of $81,600?1. Variable expense per unit2. Break-even point in units2. Break-even point in dollar sales3. Unit sales needed to attain target profit3. Dollar sales needed to attain target profit4. New break-even point in unit sales4. New break-even point in dollar sales4. Dollar sales needed to attain target profit

The break-even sales are calculated as the fixed costs divided by the contribution margin ratio. The…

Answered: Lindon Company is the exclusive…

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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Reveen Products sells camping Equipment. One of the company'sproducts a camping lantern, sells for $ 90 a unit. Variableexpenses are $ 63 per lantern, and fixed expenses associated withthe lantern total $ 135,000. per month. Required: A: compute the company's break even point in number of lanternsand in number of lanterns and in total sales dollars. B: If the variable expenses per lantern increase as a percentageof the selling price, will it result in a higher or lower breakeven point? Why? (Assume that the fixed expenses remainunchanged) C: At present the company is selling 8,000 per month. The salesmanager is convinced that a 10% reduction in the selling price willresult in a 25% increase in the number of lanterns sold each month.Prepare two contribution income statements, one under presentoperating conditions and one as operations would appear after theproposed changes. Sho both total and per unit data on yourstatements and determine if the proposed changes will be beneficialto…
Outback Outfitters sells a small camp stove for $150 per unit. Variable expenses are $105 per unit, and fixed expenses total $184,500 per month. Required: 1. What is the break-even point in unit sales and in dollar sales? 2. If the variable expenses per stove increase as a percentage of the selling price, will it result in a higher or a lower break-even point? (Assume the fixed expenses remain unchanged.) 3. At present, the company is selling 10,000 stoves per month. The sales manager is convinced a 10% reduction in the selling price would result in a 25% increase in unit sales. Prepare two contribution format income statements, one under present operating conditions, and one as operations would appear after the proposed changes. 4. Refer to the data in Required 3. How many stoves would have to be sold at the new selling price to attain a target profit of $79,000 per month? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Break-even…
! Required information [The following information applies to the questions displayed below] Jaffre Enterprises distributes a single product whose selling price is $13 per unit and whose variable expense is $8 per unit. The company's fixed expense is $14.500 per month. 2. Calculate the company's break-even point in unit sales. Unit sales to break even: units
Outback Outfitters sells recreational equipment. One of the company's products, a small camp stove, sells for $120 per unit. Variable expenses are $84 per stove, and fixed expenses associated with the stove total $ 154,800 per month. Required: What is the break - even point in unit sales and in dollar sales? If the variable expenses per stove increase as a percentage of the selling price, will it result in a higher or a lower break - even point? (Assume that the fixed expenses remain unchanged.) At present, the company is selling 17,000 stoves per month. The sales manager is convinced that a 10% reduction in the selling price would result in a 25% increase in monthly sales of stoves. Prepare two contribution format income statements, one under present operating conditions, and one as operations would appear after the proposed changes. Refer to the data in Required 3. How many stoves would have to be sold at the new selling price to attain a target profit of $77,000 per month? Complete…
Austin Avenue Clothiers pays $52 each for sports coats and has a fixed monthly cost of $780. The store sells the coats for $71 each. (a) What is the linear cost-volume function C(x)? C(x) = (b) What is the linear revenue function R(x)? R(x) = (c) What is the break-even number of coats? (Round your answer up to the nearest whole number.)
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Mauro Products distributes a single product, a woven basket whose selling price is $21 per unit and whose variable expense is $18 per unit. The company's monthly fixed expense is $4,500. Required: 1. Calculate the company's break-even point in unit sales. 2. Calculate the company's break-even point in dollar sales. (Do not round intermediate calculations.) 3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales? In dollar sales? (Do not round intermediate calculations.) 1. Break-even point in unit sales 2. Break-even point in dollar sales 3. Break-even point in unit sales 3. Break-even point in dollar sales 1,500 baskets baskets
Lucid Images Ltd manufactures premium high definition televisions. The firm’s fixed costs are$4,000,000 per year. The variable cost of each TV is $2,000, and the TVs are sold for $3,000 each. Thecompany sold 5,000 TVs during the previous year. (In the following requirements, ignore income taxes)Required:Treat each of the requirements as independent situations:a) Calculate the break-even point in units.b) What will the new break-even point be if fixed costs increase by 10 per cent? c) What was the company’s net profit for the previous year? (4 marks)d) The sales manager believes that a reduction in the sales price to $2,500 will result in orders for 1,200 more TVs each year. What will the break-even point be if the price is changed?
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