how can the break-even formula be altered to calculate the number of units that must be...

how can the break-even formula be altered to calculate the number of units that must be sold to acheive a desired level of target income?

Solutions

Expert Solution

Please give positive ratings so I can keep answering. It would help me a lot. Please comment if you have any query. Thanks!

How can the break-even formula be altered to calculate the number of units that must be sold to achieve a desired level of target income?

We know break even units is fixed costs divided by contribution per unit.

So now if we want to know the units to be sold to achieve desired level of target income then just add fixed cost with desired level of target income and divide it by contribution per unit. This will give the number of units to be sold to achieve a desired level of target income.

So in this way we can alter the break-even formula to calculate the number of units that must be sold to achieve a desired level of target income.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

17. Using the following information, calculate the Break-Even in terms of dollars and number of units....

17. Using the following information, calculate the Break-Even in terms of dollars and number of units. (15 points) BELT MANUFACTURER Cost of leather per belt- $20 Cost of one belt buckle - $25 Cost to drill holes and attach buckle per belt - $5 Management payroll per month - $10,000 Operating expense per month - $20,000 Factory rent per month - $20,000 Price charged to retail store for 5 belts - $500 Cost per belt= $20, buckle /belt=$25, drill holes&buckle/belt=$5...

Calculate the accounting break-even, the cash break-even and the financial break-even points for this project....

Calculate the accounting break-even, the cash break-even and the financial break-even points for this project. The company’s required return is 9% and the project will run for 5 years. Round your answer up to the next highest integer. Ignore any tax effects in calculating the cash break-even. Unit Variable Annual Fixed Equipment Unit Price Cost Costs Cost $ 3,020 $ 2,275 $ 9,000,000 $ 3,100.000

The break-even point tells a company the number of units or the amount of revenue that...

The break-even point tells a company the number of units or the amount of revenue that it must sell or earn in order to pay for all of its costs. At this point, the company has neither profit nor loss. Companies have two main types of costs: variable costs and fixed costs. Variable costs are those costs that vary with the number of units produced. Examples of variable costs are direct labor, direct materials and overhead. Fixed costs are those...

Please explain how to calculate Break-Even in units and Sales dollars using the Contribution Margin Approach....

Please explain how to calculate Break-Even in units and Sales dollars using the Contribution Margin Approach. Please explain the impact to Break-Even (increase,decrease,remain the same) under the following three different scenarios: 1. increase in fixed costs 2.increase in variable costs 3. increase in sales per unit

What is break-even? How is break-even calculated? How is a break-even analysis used? What are the...

What is break-even? How is break-even calculated? How is a break-even analysis used? What are the risks if break-even is not analyzed carefully?

Break-Even Analysis Most people intuitively understand that you ‘must at least break-even” and that you must...

Break-Even Analysis Most people intuitively understand that you ‘must at least break-even” and that you must go beyond break-even to earn a profit. For this exercise, create a hypothetical math problem scenario (word problem!) to demonstrate the calculation of break-even point. Set up the scenario and explain the calculation. Using that example, explain what that break-even point means for that business owner. The book example is about nachos, so choose something else that interests you.

7. Break-Even Analysis: You have been asked to calculate how many units need to be sold...

7. Break-Even Analysis: You have been asked to calculate how many units need to be sold to break even, based on the costs provided in task #3. Assume that only one conference will be attended and the estimated expenses associated with this conference are on target. Use the information in task #3 except do not consider taxes.) * **3. Cost Classification: The Lee’s have provided you with the following costs and relevant information that are assumed for year 20XY. A....

Calculate the break-even sales revenue and units for the 500 mL bottle and the proposed 2L...

Calculate the break-even sales revenue and units for the 500 mL bottle and the proposed 2L bottle. Calculate the net profit for the sales target of 10,000, 12,500 and 15,000 units of each product size. What do you recommend that Kai should do with his product line? Stick to 500 mL only? Add 2L as new size? Other suggestions? Do you agree with the online promotional and distribution strategy Kai is considering? What recommendations for improvement would you suggest? Selling...

7. Calculating Break-Even [LO3] In each of the following cases, calculate the accounting break-even and the...

7. Calculating Break-Even [LO3] In each of the following cases, calculate the accounting break-even and the cash break-even points. Ignore any tax effects in calculating the cash break-even. Unit Price Unit Variable Cost Fixed Costs Depreciation $2,980 46 9 $2,135 41 3 $8,100,000 185,000 2,770 $3,100,000 183,000 1,050

If the company reduces the set-up costs by N$100 per set-up and reduces the number of inspections needed to 400, how many units must be sold to break-even?

Taku-Tau company has provided you with the following information:Selling price per unit = N$90Variable cost per unit= N$30Activity driverCost driver rateLevel of activity driverSet-upsN$ 800 90InspectionN$ 65 500Other data: Total fixed costs (traditional)N$900 000 Total fixed costs (ABC)N$450 000If the company reduces the set-up costs by N$100 per set-up and reduces the number of inspections needed to 400, how many units must be sold to break-even?Select one:a. 8 938 unitsb. 9 338 unitsc. 8 983 unitsd. None of alle. 8 839 units

Subjects