Required: 1. What is the company's overall break-even point in dollar sales? 2. Of the total fixed expenses of $272,000, $32,010 could be avoided if the Velcro product is dropped, $121,100 if the Metal product is dropped, and $20,000 if the Nylon product is dropped. The remaining fixed expenses of $98,890 consist of common fixed expenses such as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely. a. What is the break-even point in unit sales for each product? b. If the company sells exactly the break-even quantity of each product, what will be the overall profit of the company?
Required: 1. What is the company's overall break-even point in dollar sales? 2. Of the total fixed expenses of $272,000, $32,010 could be avoided if the Velcro product is dropped, $121,100 if the Metal product is dropped, and $20,000 if the Nylon product is dropped. The remaining fixed expenses of $98,890 consist of common fixed expenses such as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely. a. What is the break-even point in unit sales for each product? b. If the company sells exactly the break-even quantity of each product, what will be the overall profit of the company?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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subject-Accounting
Transcribed Image Text:Required:
1. What is the company's overall break-even point in dollar sales?
2. Of the total fixed expenses of $272,000, $32,010 could be avoided if the Velcro product is dropped, $121,100 if the Metal product is
dropped, and $20,000 if the Nylon product is dropped. The remaining fixed expenses of $98,890 consist of common fixed expenses
such as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely.
a. What is the break-even point in unit sales for each product?
b. If the company sells exactly the break-even quantity of each product, what will be the overall profit of the company?
Transcribed Image Text:Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. Data
concerning these products appear below:
Annual sales volume
Unit selling price
Variable expense per unit
Velcro Metal
108,000 200,000
$ 2.10 $ 1.90
$ 1.00
$ 1.20
Total fixed expenses are $272,000 per year.
Nylon
302,000
$ 0.80
$ 0.70
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