Question
In: Accounting
Break-even sales and sales to realize operating income For the current year ended March 31, Cosgrove...
Break-even sales and sales to realize operating income For the current year ended March 31, Cosgrove Company expects fixed costs of $485,300, a unit variable cost of $46, and a unit selling price of $69.
a. Compute the anticipated break-even sales (units). __________units
b. Compute the sales (units) required to realize operating income of $112,700. ________units
Solutions
Expert Solution
Solution
Anticipated break-even sales (units). 21,100 units
Sales (units) required to realize operating income of $112,700. 26000 units
Working for requirement a
| A | Sale Price per unit | $ 69.00 |
| B | Variable Cost per Unit | $ 46.00 |
| C=A - B | Unit Contribution | $ 23.00 |
| D | Total Fixed cost | $ 485,300.00 |
| E=D/C | Breakeven point in units | 21,100 |
Working for requirement b
| A | Sale Price per unit | $ 69.00 |
| B | Variable Cost per Unit | $ 46.00 |
| C=A - B | Unit Contribution | $ 23.00 |
| D | Total Fixed cost +Desired Income | $ 598,000.00 |
| E=D/C | Units to be sold | 26,000 |
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