Cost-Volume-Profit Equation, Basic Concepts, Solving for Unknowns Legrand Company produces hand cream in plastic jars. Each jar sells for $3.40. The variable cost for each jar (materials, labor, and overhead) totals $2.55. The total fixed cost is $58,140. During the most recent year, 81,600 jars were sold. Required: 1. What is the break-even point in units for Legrand? What is the margin of safety in units for the most recent year? 2. Prepare an income statement for Legrand’s most recent year. 3. How many units must be sold for Legrand to earn a profit of $25,500? 4. What is the level of sales dollars needed for Legrand to earn operating income of 10% of sales?
Cost-Volume-Profit Equation, Basic Concepts, Solving for Unknowns Legrand Company produces hand cream in plastic jars. Each jar sells for $3.40. The variable cost for each jar (materials, labor, and overhead) totals $2.55. The total fixed cost is $58,140. During the most recent year, 81,600 jars were sold. Required: 1. What is the break-even point in units for Legrand? What is the margin of safety in units for the most recent year? 2. Prepare an income statement for Legrand’s most recent year. 3. How many units must be sold for Legrand to earn a profit of $25,500? 4. What is the level of sales dollars needed for Legrand to earn operating income of 10% of sales?
Chapter1: Financial Statements And Business Decisions
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Cost-Volume-Profit Equation, Basic Concepts, Solving for Unknowns
Legrand Company produces hand cream in plastic jars. Each jar sells for $3.40. The variable cost for each jar (materials, labor, and overhead) totals $2.55. The total fixed cost is $58,140. During the most recent year, 81,600 jars were sold.
| Required: | |
| 1. | What is the break-even point in units for Legrand? What is the margin of safety in units for the most recent year? |
| 2. | Prepare an income statement for Legrand’s most recent year. |
| 3. | How many units must be sold for Legrand to earn a profit of $25,500? |
| 4. | What is the level of sales dollars needed for Legrand to earn operating income of 10% of sales? |
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