Question

YUX Corporation sells a single product for $40. Its management estimates the following revenues and costs for the year 2020:

Net sales		$428,000		Selling expenses—variable		$18,600
Direct materials		112,100		Selling expenses—fixed		18,300
Direct labour		55,400		Administrative expenses—variable		9,100
Manufacturing overhead—variable		18,800		Administrative expenses—fixed		9,100
Manufacturing overhead—fixed		13,640

Assuming fixed costs and net sales are spread evenly throughout the year, determine YUX’s monthly break-even point in units and dollars. (Round answers to 0 decimal places, e.g. 5,275.)

Monthly break-even in units			units
Monthly break-even in dollars		$

Calculate the contribution margin ratio, the annual margin of safety ratio, and the annual profit. (Round answers to 0 decimal places, e.g. 15 or 15%.)

Contribution margin ratio			%
Annual margin of safety ratio			%
Annual profit		$

Determine the percentage increase in annual profits if YUX Corporation increases its selling price by 20% and all other factors (including demand) remain constant. (Round answer to 2 decimal places, e.g. 15.25%.)

Percent increase in profit

%

Assume the price remains at $40 per unit and variable costs remain the same per unit, but fixed costs increase by 20% annually. Calculate the percentage increase in unit sales required to achieve the same level of annual profit calculated in part (b). (Round answer to 2 decimal places, e.g. 15.25%.)

Percent increase in unit sales

%

Answer 1