Question

Lindon Company is the exclusive distributor for an automotive product that sells for $44.00 per unit and has a CM ratio of 30%. The company’s fixed expenses are $283,800 per year. The company plans to sell 25,100 units this year.

Required:

1. What are the variable expenses per unit? (Round your "per unit" answer to 2 decimal places.)

2. What is the break-even point in unit sales and in dollar sales?

3. What amount of unit sales and dollar sales is required to attain a target profit of $151,800 per year?

4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $4.40 per unit. What is the company’s new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $151,800?

1. Variable expense per unit:

2. Break even point in unit:

break even point in dollar sales:

3. Unit sales needed to attain target point:

dollar sales needed to target point:

4. New break-even in unit sales:

New break-even in dollar sales:

Dollars sales needed to attain target profit:

Answer 1