Question
In: Accounting
Break-Even Sales and Sales to Realize Income from Operations For the current year ending October 31,...
Break-Even Sales and Sales to Realize Income from Operations
For the current year ending October 31, Yentling Company expects fixed costs of $750,200, a unit variable cost of $64, and a unit selling price of $95.
a. Compute the anticipated break-even sales
(units).
units
b. Compute the sales (units) required to
realize income from operations of $173,600.
units
Solutions
Expert Solution
- Contribution margin per unit = Selling price – Variable cost per unit
= 95 – 64
= $31 per unit
Break-even point in unit sales = Fixed costs / Contribution margin per unit
= $750,200 / $31
= 24,200 units
- Contribution margin = Income from operations + Fixed costs
= $173,600 + $750,200
= $923,800
Sales (units) = Contribution margin / Contribution margin per unit
= $923,800 / $31
= 29,800 units
ekkarill92 answered 2 years agoRelated Solutions
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