Lindon Company is the exclusive distributor for an automotive product that sells for $50.00 per unit and has a CM ratio of 30%. The company's fixed expenses are $345,000 per year. The company plans to sell 27,200 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 $195,000 per year? 4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $5.00 per unit. What is the company's new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $195,000? 1. Variable expense per unit $ 35.00 2. Break-even point in units 1,150,000 2. Break-even point in dollar sales 3. Unit sales needed to attain target profit $ 23,000 36,000 3. Dollar sales needed to attain target profit 4. New break-even point in unit sales 1,800,000 17,250 4. New break-even point in dollar sales $ 862,500 4. Dollar sales needed to attain target profit $ 1,350,000
Lindon Company is the exclusive distributor for an automotive product that sells for $50.00 per unit and has a CM ratio of 30%. The company's fixed expenses are $345,000 per year. The company plans to sell 27,200 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 $195,000 per year? 4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $5.00 per unit. What is the company's new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $195,000? 1. Variable expense per unit $ 35.00 2. Break-even point in units 1,150,000 2. Break-even point in dollar sales 3. Unit sales needed to attain target profit $ 23,000 36,000 3. Dollar sales needed to attain target profit 4. New break-even point in unit sales 1,800,000 17,250 4. New break-even point in dollar sales $ 862,500 4. Dollar sales needed to attain target profit $ 1,350,000
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 5EB: Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90....
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Need help with calculating #2 break even point in units and sales
![Lindon Company is the exclusive distributor for an automotive product that sells for $50.00 per unit and has a CM ratio of 30%. The
company's fixed expenses are $345,000 per year. The company plans to sell 27,200 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 $195,000 per year?
4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $5.00 per unit. What is the
company's new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $195,000?
1. Variable expense per unit
$
35.00
2. Break-even point in units
1,150,000
2. Break-even point in dollar sales
$
23,000
3. Unit sales needed to attain target profit
36,000
3. Dollar sales needed to attain target profit
2$
1,800,000
4. New break-even point in unit sales
17,250
4. New break-even point in dollar sales
$
862,500
4. Dollar sales needed to attain target profit
$
1,350,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb29dd8cb-0b24-4459-9fd0-543a617b5e7a%2Fbf4fc421-b73c-4b44-a42b-fb3150dccf1e%2F4wvuslm_processed.png&w=3840&q=75)
Transcribed Image Text:Lindon Company is the exclusive distributor for an automotive product that sells for $50.00 per unit and has a CM ratio of 30%. The
company's fixed expenses are $345,000 per year. The company plans to sell 27,200 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 $195,000 per year?
4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $5.00 per unit. What is the
company's new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $195,000?
1. Variable expense per unit
$
35.00
2. Break-even point in units
1,150,000
2. Break-even point in dollar sales
$
23,000
3. Unit sales needed to attain target profit
36,000
3. Dollar sales needed to attain target profit
2$
1,800,000
4. New break-even point in unit sales
17,250
4. New break-even point in dollar sales
$
862,500
4. Dollar sales needed to attain target profit
$
1,350,000
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