Question

Pentucket Computer Company manufactures personal computers and tablets. Based on the latest information from the cost​ accountant, using the current sales​ mix, the​ weighted-average sales price per unit is $ 780 and the​ weighed-average variable cost per unit is $ 624. The company does not expect the sales mix to vary for the next year. Average fixed costs per month are $76,440.

Reqirement 1. What is the number of units that must be sold each month to reach the breakeven​ point?

Start by selecting the formula and entering the amounts to compute the breakeven point in units. ​(Complete all answer boxes. Enter a​ "0" for any zero​ balances.)

(Fixed Costs) + (Target Profit) / (Contribution margin per unit) = Breakeven in units

(____________________) - (_______________________) / (_________________) = ________________

Requirement 2. If the company currently sells 910 units per​ month, what is the margin of safety in units and​ dollars?

Begin by calculating the margin of safety in units:

( Expected Sales) - (Breakeven Sales) = Margin of saftey in units

(____________________) - (_______________________) = _______________

Now calculate the margin of safety in dollars.

(Margin of saftey in units) x (Sales price per unit) = Margin of saftey in dollars

(____________________) - (_______________________) = _______________

Requirement 3.

If Pentucket Computer Company desires to make a profit of $ 20, 280 per​ month, how many units must be​ sold? ​(Complete all answer boxes. Enter a​ "0" for any zero​ balances.)

(Fixed Costs) + (Target Profit) / ( Contribution margin per unit) = Required sales in units

(____________________) - (_______________________) / (_________________) = ________________

Requirement 4.

Pentucket Computer Company thinks it can restructure some costs so that fixed costs will be reduced to $28,080 per​ month, but the​ weighted-average variable cost per unit will increase to $ 702 per unit. What is the new breakeven point in​ units? Does this increase or decrease the margin of​ safety? Why or why​ not?

Begin by calculating the new breakeven point in units. ​(Complete all answer boxes. Enter a​ "0" for any zero​ balances.)

(Fixed Costs) + (Target Profit) / (Contribution margin per unit) = Breakeven point in units

(____________________) - (_______________________) / (_________________) = ________________

Answer 1