Rose & Daughter Company sells Products S and T and has made the following estimates for the coming year: Product Unit Selling Price Unit Variable Cost Sales Mix S $30 $24 60% T 70 56 40% Fixed costs are estimated at $230,000. For the purposes of break-even analysis, determine the following: a. Break-even sales (units) for M b. Break-even sales (units) of S and T c. Sales units of M necessary to realize an operating income of $110,400 for the coming year (round to the nearest whole unit)
Rose & Daughter Company sells Products S and T and has made the following estimates for the coming year:
|
Product |
Unit Selling Price |
Unit Variable Cost |
Sales Mix |
|
S |
$30 |
$24 |
60% |
|
T |
70 |
56 |
40% |
Fixed costs are estimated at $230,000. For the purposes of break-even analysis, determine the following:
a. Break-even sales (units) for M
b. Break-even sales (units) of S and T
c. Sales units of M necessary to realize an operating income of $110,400 for the coming year (round to the nearest whole unit)
BREAKEVEN POINT
Break Even means the volume of production or sales where there is no profit or loss.
In other words, Break Even Point is the volume of production or sales where total costs are equal to revenue.
Breakeven Point in Units
= Fixed Cost ÷ Contribution Margin Per Unit
Step by step
Solved in 4 steps
