Question: lonic charge is a newly organized manufacturing business trial plans to manufacture and sell 60,000 units per year of a new product The following estimates have been made of the company's costs and expenses (other than income taxes): Manufacturing costs: Direct Materials Direct labor Fixed Variable per unit $25 15 manufacturing overhead $500,000 8 Period costs: Selling expenses Total Administrative expenses $300,000 800000 2 50 a.) What should the company establish as the sales price per unit if it sets a target of earning an operating income of $700,000 by producing and selling 60,000 units during the first year operations? b.) At the unit sales price compute in part a, How many units must the company produce and sell to break even? (Assume all units produced are sold)

Question: lonic charge is a newly organized manufacturing business trial plans to manufacture and sell 60,000 units per year of a new product The following estimates have been made of the company's costs and expenses (other than income taxes): Manufacturing costs: Direct Materials Direct labor Fixed Variable per unit $25 15 manufacturing overhead $500,000 8 Period costs: Selling expenses Total Administrative expenses $300,000 800000 2 50 a.) What should the company establish as the sales price per unit if it sets a target of earning an operating income of $700,000 by producing and selling 60,000 units during the first year operations? b.) At the unit sales price compute in part a, How many units must the company produce and sell to break even? (Assume all units produced are sold)

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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