Question

IL More CVP (20 points) Assume Fixed costs are $300,000. Variable costs are $25 per unit. The price of your goods is $50. Your target profit is $150.000 a. Compute break even in units (5 points) Tove 25 = 12.ow. contributin targin > a Fiterea -- BEQ 25 -0.5 - most popie BEDE Forest thuy b. Compute break even in dollars. (5 points) Laux so= 600,00 Bourou as = 600000 c. Compute your target profit in units (5 points) RFC 17-sans-cost 150,000 + 300.00 - 78,000 magie 25 d. Compute your target profit in dollars. (5 points) 1800x50=900 ouo rocicco ao 3.150,00of ourou 0.5

Managerial accounting.

Can someone check if i did this correctly? I dont have a better image (sorry if the pic is blurry).

Answer 1

All answers are absolutely correct. Here I am providing you the detailed solution for each question.
Ans. 11 a	For the calculation of break even point in units, we need to calculate contribution margin per unit first.
	Contribution margin per unit = Selling price per unit - Variable cost per unit
	$50 - $25
	$25   per unit
	Break even point in units   =    Total fixed cost / Contribution margin per unit
	$300,000 / $25
	12,000 units
Ans. 11 b	Break even point in dollars   =   Break even point in units * Selling price per unit
	12,000 * $50
	$600,000
Ans. 11 c	Sales units for target profit   =    (Fixed cost + Target profit) / Contribution margin per unit
	($300,000 + $150,000) / $25
	$450,000 / $25
	18,000 units
Ans. 11 d	Sales dollars for target profit   =    Sales units for target profit * Selling price per unit
	18,000 * $50
	$900,000