Target Profit: It refers to the desired amount of profit that a company expects to achieve by the end of an accounting period after it reaches its break-even point. Thus, the company needs to compute the required sales to earn the target profit. The formula to calculate the required sales to earn the target profit is as follows: Sales ( units ) = Fixed Costs+Target Profit Unit Contribution Margin To determine: the break-even point in sales units.

Question

1. Break-Even Point Hilton Enterprises sells a product for $118 per unit. The variable cost is $80 per unit, while fixed costs are $434,644. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $123 per unit. 2. Target Profit Trailblazer Company sells a product for $170 per unit. The variable cost is $60 per unit, and fixed costs are $572,000. Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of $200,200.

Answer 1

Question

Chapter 21, Problem 21.4BPE

(a)

To determine

Target Profit: It refers to the desired amount of profit that a company expects to achieve by the end of an accounting period after it reaches its break-even point. Thus, the company needs to compute the required sales to earn the target profit. The formula to calculate the required sales to earn the target profit is as follows:

Sales(units) =Fixed Costs+Target ProfitUnit Contribution Margin

To determine: the break-even point in sales units.

(b)

To determine

the break-even point if the company desires a target profit of $50,000.

Expert Solution & Answer

Trending nowThis is a popular solution!

See solution

Check out sample textbook solution

Students have asked these similar questions

1. Break-Even Point Hilton Enterprises sells a product for $118 per unit. The variable cost is $80 per unit, while fixed costs are $434,644. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $123 per unit. 2. Target Profit Trailblazer Company sells a product for $170 per unit. The variable cost is $60 per unit, and fixed costs are $572,000. Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of $200,200.

Target Profit Altstadt Inc. sells a product for $50 per unit. The variable cost is $20 per unit, and fixed costs are $1,800,000. Determine (a) the break-even point in sales units and (b) the sales units required to achieve a target profit of $270,000. a. Break-even point in sales units b. Break-even point in sales units required to achieve a target profit of $270,000

Trailblazer Company sells a product for $270 per unit. The variable cost is $150 per unit, and fixed costs are $576,000. Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of $224,640. a. Break-even point in sales units units b. Break-even point in sales units if the company desires a target profit of $224,640 units