Lindon Company is the exclusive distributor for an automotive product that sells for $52.00 per unit and has a CM ratio of 30%. The company's fixed expenses are $366,600 per year. The company plans to sell 27,900 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 $210,600 per year? 4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $5.20 per unit. What is the company's new break-even point in unit sales and dollar sales? What dollar sales is required to attain a target profit of $210,600? 1. Variable expense per unit 2. Break-even point in units Break-even point in dollar sales 3. Unit sales needed to attain target profit Dollar sales needed to attain target profit 4. New break-even point in unit sales New break-even point in dollar sales Dollar salos pooded to attain tergot profit
Lindon Company is the exclusive distributor for an automotive product that sells for $52.00 per unit and has a CM ratio of 30%. The company's fixed expenses are $366,600 per year. The company plans to sell 27,900 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 $210,600 per year? 4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $5.20 per unit. What is the company's new break-even point in unit sales and dollar sales? What dollar sales is required to attain a target profit of $210,600? 1. Variable expense per unit 2. Break-even point in units Break-even point in dollar sales 3. Unit sales needed to attain target profit Dollar sales needed to attain target profit 4. New break-even point in unit sales New break-even point in dollar sales Dollar salos pooded to attain tergot profit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Info in images

Transcribed Image Text:Gold Star Rice, Ltd., of Thailand exports Thai rice throughout Asia. The company grows three varieties of rice-White, Fragrant, and
Loonzain. Budgeted sales by product and in total for the coming month are shown below:
Product
White
Fragrant
Loonzain
Total
Percentage of total sales
Sales
Variable expenses
48 %
20 %
32 %
100 %
$ 369,600
$ 154,000
$ 246,400
$ 770,000
369,600
100 %
100 %
100 %
100 %
110,880
30 %
123, 200
80 %
135,520
55 %
48 %
Contribution margin
$ 258,720
70 %
%24
30,800
20 %
$ 110,880
45 %
400,400
52 %
Fixed expenses
232,960
Net operating income
$ 167,440
Fixed expenses
$232,960
Dollar sales to break-even
= $448,000
CM ratio
0.52
As shown by these data, net operating income is budgeted at $167,44O for the month and the estimated break-even sales is $448,000.
Assume that actual sales for the month total $770,000 as planned; however, actual sales by product are: White, $246,400; Fragrant,
$308,000; and Loonzain, $215,600.
Required:
1. Prepare a contribution format income statement for the month based on the actual sales data.
2. Compute the break-even point in dollar sales for the month based on your actual data.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Prepare a contribution format income statement for the month based on the actual sales data.
Gold Star Rice, Ltd.
Contribution Income Statement
Product
White
Fragrant
Loonzain
Total
Percentage of total sales
%
%
%
%
%
%
%
0 %
0 % $
0 %
0 %
Required 1
Required 2
Compute the break-even point in dollar sales for the month based on your actual data. (Do not round intermediate
calculations. Round your answer to the nearest whole dollar amount.)
Break-even point in dollar sales

Transcribed Image Text:Lindon Company is the exclusive distributor for an automotive product that sells for $52.00 per unit and has a CM ratio of 30%. The
company's fixed expenses are $366,600 per year. The company plans to sell 27,900 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 $210,600 per year?
4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $5.20 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 $210,600?
1.
Variable expense per unit
2. Break-even point in units
Break-even point in dollar sales
3.
Unit sales needed to attain target profit
Dollar sales needed to attain target profit
4. New break-even point in unit sales
New break-even point in dollar sales
Dollar sales needed to attain target profit
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps

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