Question

Legrand Company produces hand cream in plastic jars. Each jar sells for $3.40. The variable cost for each jar (materials. labor, and overhead) total $2.55. Total fixed cost is $58,140. During the most recent years, 81,600 jars were sold. 1. What is the break-even point in units for Legrand? What is the margin of safety in units for the most recent year? 2. Prepare an income statement for Legarnd's most recent year. 3. How many units must be sold for Legrand to earn a profit of $25,500? 4. What is the level of sales dollars needed for Legrand to earn operating income of 10% of sales?

Please fill in the missing spots and SHOW YOUR WORK for each answer per the spreadsheet under the enter calculations below as needed spot.  

Answer 1

Angwer: la Breakeven in unit = Fired cost combibution per unit contribution per unite fales - variable cost perurit z 3.40 – 2.55 e 0.85$ in Break even point an unit = 58,140 0.85 => 168,400 units] 16: margin of safety in units = Actual sales on units - Breakeven saleefponits = 81,600 – 68,400 (13,200 2 Income statement Particulars Q. Sales Reve nue (81,600 x 3.4) b. Variable cost (81,600 x 2:55) c. Total contribution d. total Fired cost e Operating Income Amount $. 977,440 (208,080) 69,360 58,1402 п, ало

3. No of units to be = Fixed cost - Target profit fole for defined project contriloution per unit = 58,140 + 2 5,500 0.85 e 98,400 units

4. Contribution Ratio - contribution per unit saler per unit - X 100 2 0.854100 3.4 e 25% het the sales be x. - Required profit 10% of a X z 58,140 + 104.0f » a 5 . a 25% -10%.n a 58,140 2154.12 58,140 2 92 58,140/194. e 387,600$.9n sales. profit = 38,760$. No of units to be solde 387,600 3.4 e 114,000 units