Question

Check my work Cohen Company produces and sells socks. Variable cost is $12.60 per pair, and fixed costs for the year total $109,200. The selling price is $21 per pair. 0.25 points Skipped Required: 1. Calculate the breakeven point in units. (Do not round intermediate calculations.) 2. Calculate the breakeven point in sales dollars. (Do not round intermediate calculations.) 3. Calculate the units required to make a before-tax profit of $58,800. (Do not round intermediate calculations.) 4. Calculate the sales dollars required to make a before-tax profit of $48,720. (Do not round intermediate calculations.) 5. Calculate the sales, in units and in dollars, required to make an after-tax profit of $38,720 given a tax rate of 30%. (Do not round intermediate calculations. Round sales in units up to the nearest whole number and sales in dollars to the nearest whole dollar.) eBook References units 1. Breakeven point 2. Breakeven point in sales dollars 3. Units required 4. Sales in dollars 5. Sales in units Sales in dollars

Answer 1

Ans. 1	Contribution margin per unit = Selling price per unit - Variable cost per unit
	$21 - $12.60
	$8.40 per unit
	Break even point in units   =    Total fixed cost / Contribution margin per unit
	$109,200 / $8.40
	13,000 units
Ans. 2	Contribution margin ratio =   Contribution margin / Sales * 100
	$8.40 / $21 * 100
	40%
	Break even point in dollars   =    Total fixed cost / Contribution margin ratio
	$109,200 / 40%
	$273,000
Ans. 3	Unit sales for target profit   = (Fixed cost + Before tax profit) / Contribution margin per unit
	($109,200 + $58,800) / $8.40
	$168,000 / $8.40
	20,000   units
Ans. 4	Sales for target profit   = (Fixed cost + Before tax profit) / Contribution margin ratio
	($109,200 + $48,720) / 40%
	$157,920 / 40%
	$394,800