Question

In: Accounting

What is the break-even point in unit sales?

Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales $ 90,000 Variable expenses 49,500 Contribution margin 40,500 Fixed expenses 33,210 Net operating income $ 7,290

What is the break-even point in unit sales?

Solutions

Expert Solution

Contribution margin per unit = Total Contribution margin / sales volume

Contribution margin per unit = $40,500 / 1,000 units

Contribution margin per unit = $40.50 per unit

 

Break-even point in unit sales = Fixed expenses / Contribution margin per unit

Break-even point in unit sales  = $33,210 / $40.50 per unit

Break-even point in unit sales  = 820 units

Break-even point in unit sales = 820 units

DEEPIKA GOYAL answered 2 years ago
Next > < Previous

Related Solutions

Determine the (a) break-even point in sales units and (b) break-even point in sales units assuming that the selling price is increased to $67 per unit
Nicolas Enterprises sells a product for $60 per unit. The variable cost is $35 per unit, while fixed costs are $80,000. Determine the (a) break-even point in sales units and (b) break-even point in sales units assuming that the selling price is increased to $67 per unit
how does the break-even point fit into this discussion? What is the break-even point? Why is...
how does the break-even point fit into this discussion? What is the break-even point? Why is it an important concept in managerial accounting? What are its uses?
(Break-even analysis) Project Accounting ​Break-Even Point​ (in units) Price per Unit Variable Cost per Unit Fixed...
(Break-even analysis) Project Accounting ​Break-Even Point​ (in units) Price per Unit Variable Cost per Unit Fixed Costs Depreciation A 6, 230 ​$52 ​$102,000 ​$26,000 B    760 ​$1,000 ​$499,000 ​$103,000 C 1,970 ​$25 ​$13 ​$5,000 D 1,970 ​$25 ​$7 ​$17,000 a.  Calculate the missing information for each of the above projects. b.  Note that Projects C and D share the same accounting​ break-even. If sales are above the​ break-even point, which project would you​ prefer? Explain why. c.  Calculate the cash​...
Break-Even Point
S.S Corporation had sales of Rs. 4,500,000. The fixed expense was Rs. 1,200,000 and variable expense totaled Rs. 1,800,000. You are required to calculate Break-Even Point for S.S Corporation.
a. How are contribution margin and break even related? b. What happens to break even point...
a. How are contribution margin and break even related? b. What happens to break even point if variable cost per unit changes, if fixed cost changes? c. Explain the degree of operating leverage and how it is related to a companies profit risk.
Q2. (a) WHAT IS BREAK - EVEN POINT? (b) EXPLAIN THE IMPORTANT MANAGERIAL USES OF BREAK-EVEN...
Q2. (a) WHAT IS BREAK - EVEN POINT? (b) EXPLAIN THE IMPORTANT MANAGERIAL USES OF BREAK-EVEN ANALYSIS.
Considering that the company has a unit break-even point of 600 units, what is the margin of safety in terms of both units and sales revenue?
APPLY THE CONCEPTS: Margin of SafetyMargin of safety can allow you to see how much padding there is for your company between profit and loss. If this number is great, it may indicate that your company is performing very well. If this number is small, it may be worth looking into possible remediation. Consider the following pricing and cost information:Price and Cost InformationAmountSelling Price per Unit$400Variable Cost per Unit$325Total Fixed Cost$45,000For the upcoming period, the company projects that it will...
1A. If Canace Company, with a break-even point at $489,800 of sales, has actual sales of...
1A. If Canace Company, with a break-even point at $489,800 of sales, has actual sales of $620,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number. 1. $ 2.   % b. If the margin of safety for Canace Company was 30%, fixed costs were $1,656,900, and variable costs were 70% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even...
If Canace Company, with a break-even point at $402,000 of sales, has actual sales of $600,000,...
If Canace Company, with a break-even point at $402,000 of sales, has actual sales of $600,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number. 1. $ 2. % b. If the margin of safety for Canace Company was 40%, fixed costs were $1,735,200, and variable costs were 60% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in...
Break-Even Sales Currently, the unit selling price of a product is $380, the unit variable cost...
Break-Even Sales Currently, the unit selling price of a product is $380, the unit variable cost is $310, and the total fixed costs are $1,001,000. A proposal is being evaluated to increase the unit selling price to $420. a. Compute the current break-even sales (units). units b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant. units
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT