Given information: Fixed factory overhead costs: $60,000 Fixed selling overhead costs: $12,000 Variable manufacturing cost per unit: $12 Variable selling cost per unit: $3 Selling price per unit: $24 1. What is the break-even point in terms of units? Explain how you calculated your answer. 2. What is the dollar value of the sales for that number of units? Explain how you calculated your answer. 3. How many units would need to be sold if wanting to earn $90,000 profit? Explain how you calculated your answer. 4. What would the sales price be if wanting to earn $90,000 profit, but capacity is constrained at 8,000 units? Explain how you calculated your answer. 5. How can going through these calculations aid a manager in managing the business? Provide a complete, well written explanation.
Given information:
- Fixed
factory overhead costs: $60,000 - Fixed selling overhead costs: $12,000
- Variable manufacturing cost per unit: $12
- Variable selling cost per unit: $3
- Selling
price per unit: $24
1. What is the break-even point in terms of units? Explain how you calculated your answer.
2. What is the dollar value of the sales for that number of units? Explain how you calculated your answer.
3. How many units would need to be sold if wanting to earn $90,000 profit? Explain how you calculated your answer.
4. What would the sales price be if wanting to earn $90,000 profit, but capacity is constrained at 8,000 units? Explain how you calculated your answer.
5. How can going through these calculations aid a manager in managing the business? Provide a complete, well written explanation.
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Given information:
- Fixed
factory overhead costs: $60,000 - Fixed selling overhead costs: $12,000
- Variable manufacturing cost per unit: $12
- Variable selling cost per unit: $3
- Selling
price per unit: $24
4. What would the sales price be if wanting to earn $90,000 profit, but capacity is constrained at 8,000 units? Explain how you calculated your answer.
5. How can going through these calculations aid a manager in managing the business? Provide a complete, well written explanation.
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