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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

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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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
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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