Samy Inc. operated at its normal capacity during the current year, producing 65,000 units of its single product. Sales totalled 55,000 units at an average price of $20 per unit. Variable cost of goods sold amounted to $8 per unit, and sales commissions were paid out at $4 per unit sold. Fixed product costs, incurred uniformly throughout the year, amounted to $193,000 and fixed period costs, incurred uniformly, amounted to $23,000 per quarter. Required: 1. Compute Samy's break-even point in sales dollars for the current year. (Do not round intermediate calculations. Round your answer to the nearest whole number.) 2. If Samy's fixed product costs unexpectedly increase by 10%, what is the new unit selling price that would yield the same break-even sales as before the cost increase? (Do not round intermediate calculations and round your answer to 2 decimal places.)

Samy Inc. operated at its normal capacity during the current year, producing 65,000 units of its single product. Sales totalled 55,000 units at an average price of $20 per unit. Variable cost of goods sold amounted to $8 per unit, and sales commissions were paid out at $4 per unit sold. Fixed product costs, incurred uniformly throughout the year, amounted to $193,000 and fixed period costs, incurred uniformly, amounted to $23,000 per quarter. Required: 1. Compute Samy's break-even point in sales dollars for the current year. (Do not round intermediate calculations. Round your answer to the nearest whole number.) 2. If Samy's fixed product costs unexpectedly increase by 10%, what is the new unit selling price that would yield the same break-even sales as before the cost increase? (Do not round intermediate calculations and round your answer to 2 decimal places.)

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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