Explain and compare how to compute the units produced and sold for aTarget Income and for...

Explain and compare how to compute the units produced and sold for aTarget Income and for the Break-even point and provide an example for computing the units produced and sold for a Target Income and for the Break-even point.

Expert Solution

Contribution margin per unit = Selling Price per unit-Variable cost per unit

Breakeven point in units is the number of units where profit is NIL.

Breakeven point in units = Fixed costs/ Contribution margin per unit

Number of units to achieve target profit = (Target profit+Ficed costs)/Contribution margin per unit

Example:

Selling price per unit = $120
Variable cost per unit = $40

Therefore,
Contribution margin per unit= $80

Fixed costs = $160000

Then,
Breakeven point in units = $160000/$80
	= 2000 units

If,
Targeted profit = $80000

Then,
Number of units to achieve targeted profit = ($160000+$80000)/$80

		= 3000 units

ekkarill92 answered 3 years ago

If the number of units produced exceeds the number of units sold, then net operating income...

If the number of units produced exceeds the number of units sold, then net operating income under absorption costing will: be equal to the net operating income under variable costing less total fixed manufacturing costs. be greater than net operating income under variable costing. be equal to the net operating income under variable costing. be equal to the net operating income under variable costing plus total fixed manufacturing costs. . A company produces a single product. Last year, fixed manufacturing...

C. Prepare a budgeted income statement, assuming 600 units to be produced and sold, a per...

C. Prepare a budgeted income statement, assuming 600 units to be produced and sold, a per unit selling price of $85, an income tax rate of 28% and the following information. Cost of goods sold of $35 per unit Labor = $400/month One part-time employee will be hired to take care of packaging and shipping. This employee will be paid $10 per hour. He or she is estimated to work 40 hours total per month. Advertising fees = $3,000 Bank...

If 12,500 units are produced and sold, what is the variable cost per unit produced and sold?

Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost Per UnitDirect materials$ 5.60Direct labor$ 3.10Variable manufacturing overhead$ 1.40Fixed manufacturing overhead$ 4.00Fixed selling expense$ 2.60Fixed administrative expense$ 2.20Sales commissions$ 1.20Variable administrative expense$ 0.454. If 12,500 units are produced and sold, what is the variable cost per unit produced and sold? (Round your answer to 2 decimal places.)

Number of units produced 30, 000 Number of units sold &nbsp

Number of units produced 30, 000 Number of units sold 28,000 Selling price $20 Beginning inventory 0 Fixed selling and administrative costs $ 20,000 Fixed manufacturing overhead $ 150,000 Direct materials cost per unit 2 Direct manufacturing labor 6 Variable manufacturing overhead per unit 4 Variable selling expenses per unit 2 FMOH per unit 5 1.Operating Income under Absorption method is 2.If Sales Revenue $560,000 then Gross Margin under Absorption method is 3.Cost of Goods Sold and Ending inventory under Absorption costing method are: 4.What is...

1. If 18,000 units are produced and sold, what is the variable cost per unit produced and sold?

Refer to the data given in Exercise 1-7. Answer all questions independently. Kubin Company's relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000 units, its average costs per unit are as follows: Required: 1. If 18,000 units are produced and sold, what is the variable cost per unit produced and sold? 2. If 22,000 units are produced and sold, what is the variable cost per unit produced and sold? 3. If 18,000 units are...

- Income Statement Data for 20XX: Units produced and sold = 420 Sales ($80 per unit...

- Income Statement Data for 20XX: Units produced and sold = 420 Sales ($80 per unit selling price) = $33600 Cost of goods sold ($30 per unit, all variable costs) = $12600 Labor = $0 (Mr. and Mr. Lee were the only ones working and did not pay themselves) Advertising fees =$2000 Bank fees = $150 Phone/internet = $1200 Shipping ($3 per unit) = $1260 Utilities = $900 Office supplies = $800 Interest expense on note payable = $350 Depreciation...

At Exodus Inc., 40,000 units are produced and 30,000 units are sold for a total of...

At Exodus Inc., 40,000 units are produced and 30,000 units are sold for a total of $720,000 in the first year of operations, resulting in operating income of $240,000. Fixed manufacturing costs are $120,000 and administrative costs are $80,000. Given this, the cost of the ending finished goods inventory under the absorption costing approach is

selling price $95 units in beginning inventory 100 units produced 6,200 units sold 5,900 units in...

selling price $95 units in beginning inventory 100 units produced 6,200 units sold 5,900 units in ending inventory 400 variable cost per unit direct materials $42 direct labor $28 variable manufacturing overhead $1 variable selling and administrative $5 fixed costs fixed manufacturing overhead $62,000 fixed selling and administrative $35,400 Lee Corporation, which has only one product, has provided the following data concerning its most recent month of operations. The company produces the same number of units every month, although the...

Assume the following information for a company that produced 10,000 units and sold 8,000 units during...

Assume the following information for a company that produced 10,000 units and sold 8,000 units during its first year of operations and produced 8,000 units and sold 10,000 units during its second year of operations: Per Unit Per Year Selling price $ 200 Direct materials $ 82 Direct labor $ 50 Variable manufacturing overhead $ 10 Sales commission $ 8 Fixed manufacturing overhead $ 300,000 Using absorption costing, what is the cost of goods sold for the second year of...

You are given the following information: Units in beginning inventory 0 Units produced 40,000 Units sold...

You are given the following information: Units in beginning inventory 0 Units produced 40,000 Units sold 37,000 Selling price per unit $120.00 Variable costs per unit: Direct materials $15.00 Direct labor $30.00 Variable manufacturing overhead $5.00 Variable selling and administrative $3.00 Fixed expenses per year: Fixed manufacturing overhead $600,000 Fixed selling and administrative $800,000 Based on this information, calculate the company's operating income under both absorption costing and variable costing approaches. If there is a difference between the two income...

Question