Millstone Company produces only one product. The normal capacity is 20,000 units per year, and the unit sales price is $5. Relevant costs are: Unit Variable Cost Total Fixed Cost Materials $1 Direct labor $1.20 Factory Overhead $0.50 $15,000 Marketing expenses $0.30 $5,000 $6,000 Administrative expenses Required: Compute the following: a. The break-even point in units of product. b. The break-even point in dollars of sales. c. The number of units of product that must be produced and sold to achieve a profit of $10,000. d. The sales revenue required to achieve a profit of $10,000.

Millstone Company produces only one product. The normal capacity is 20,000 units per year, and the unit sales price is $5. Relevant costs are: Unit Variable Cost Total Fixed Cost Materials $1 Direct labor $1.20 Factory Overhead $0.50 $15,000 Marketing expenses $0.30 $5,000 $6,000 Administrative expenses Required: Compute the following: a. The break-even point in units of product. b. The break-even point in dollars of sales. c. The number of units of product that must be produced and sold to achieve a profit of $10,000. d. The sales revenue required to achieve a profit of $10,000.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 47E: Klamath Company produces a single product. The projected income statement for the coming year is as...

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