Lindon Company is the exclusive distributor for an automotive product that sells for $40.00 per unit and has a CM ratio of 30%. The company’s fixed expenses are $246,000 per year. The company plans to sell 23,700 units this year. 1. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $4.00 per unit. What is the company’s new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $126,000?
Lindon Company is the exclusive distributor for an automotive product that sells for $40.00 per unit and has a CM ratio of 30%. The company’s fixed expenses are $246,000 per year. The company plans to sell 23,700 units this year. 1. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $4.00 per unit. What is the company’s new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $126,000?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 40P
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Lindon Company is the exclusive distributor for an automotive product that sells for $40.00 per unit and has a CM ratio of 30%. The company’s fixed expenses are $246,000 per year. The company plans to sell 23,700 units this year.
1. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $4.00 per unit. What is the company’s new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $126,000?
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