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? Answer is complete but not entirely correct. 1. Variable expense per unit $ 36.40 2. Break-even point in units 10,071 X Break-even point in dollar sales $ 523,692 X 3. Unit sales needed to attain target profit 15,857 X Dollar sales needed to attain target profit 824,564 X 4. New break-even point in unit sales 17,625 New break-even point in dollar sales $ 916,500 Dollar sales needed to attain target profit $ 1,443,000
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? Answer is complete but not entirely correct. 1. Variable expense per unit $ 36.40 2. Break-even point in units 10,071 X Break-even point in dollar sales $ 523,692 X 3. Unit sales needed to attain target profit 15,857 X Dollar sales needed to attain target profit 824,564 X 4. New break-even point in unit sales 17,625 New break-even point in dollar sales $ 916,500 Dollar sales needed to attain target profit $ 1,443,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![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 $210,600?
X Answer is complete but not entirely correct.
1.
Variable expense per unit
2$
36.40
2.
Break-even point in units
10,071 X
Break-even point in dollar sales
$
523,692 X
3.
Unit sales needed to attain target profit
15,857 X
Dollar sales needed to attain target profit
824,564 X
4.
New break-even point in unit sales
17,625
New break-even point in dollar sales
24
916,500
Dollar sales needed to attain target profit
$ 1,443,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbbdbe71c-541e-46f5-9d8b-fafd6cc28b88%2Ffda58f80-bdd5-4fd8-9a21-ba95979edd75%2Fktgz5db_processed.png&w=3840&q=75)
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 $210,600?
X Answer is complete but not entirely correct.
1.
Variable expense per unit
2$
36.40
2.
Break-even point in units
10,071 X
Break-even point in dollar sales
$
523,692 X
3.
Unit sales needed to attain target profit
15,857 X
Dollar sales needed to attain target profit
824,564 X
4.
New break-even point in unit sales
17,625
New break-even point in dollar sales
24
916,500
Dollar sales needed to attain target profit
$ 1,443,000
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