# For the coming year, Cleves Company anticipates a unit selling price of \$100, a unit variable cost of \$60, and fixed costs of \$480,000. Instructions1. Compute the anticipated break even sales (units)2. Compute the sales (units) required to realize a target profit of \$240,0003. Construct a cost volume profit chart, assuming maximum sales of 20,000 units within the relevant range4. Determine the probable income (loss) from operations if sales total 16,000 units

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For the coming year, Cleves Company anticipates a unit selling price of \$100, a unit variable cost of \$60, and fixed costs of \$480,000. Instructions

1. Compute the anticipated break even sales (units)

2. Compute the sales (units) required to realize a target profit of \$240,000

3. Construct a cost volume profit chart, assuming maximum sales of 20,000 units within the relevant range

4. Determine the probable income (loss) from operations if sales total 16,000 units

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Step 1

1. Calculate the anticipated break-even sales in units. help_outlineImage TranscriptioncloseStep 1: Determine the contribution margin per unit. (Selling price per unit Contribution margin per unit = [ Variable cost per unit (S100 per unit -\$60 per unit) = \$40 per unit Step 2: Compute the break-even sales in units. Break-even point in sales(Units) - Contribution margin per unit Fixed cost \$480, 000 \$40 per unit =12,000 units fullscreen
Step 2

2. Calculate the sales (Units) that are required to realize a target of \$240,000. help_outlineImage TranscriptioncloseFixed cost Target profit Sales (Units)Contribution margin per unit \$480,000+\$240, 000 \$40 per unit 18,000 units fullscreen
Step 3

3. Construct a cost volume profit chart by assuming th... help_outlineImage TranscriptioncloseOperating Profit Area \$2.000,000 Break-Even Point \$1.500.000 Sales Total Costs \$1200,000 \$1,000,000 \$500,000 Operating Loss Area \$0 18000 20,000 2,000 4000 6000 8.000 10,000 12,000 14,000 16,000 Units of Sales Sales and Costs fullscreen

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