Question

À sv SE = Design Layout References v 12 A À Aav A albo * X Avev A acct hw Mailings Review View >> v Evv33 21 E Ev v A v Units sold to Break Even, Unkt Variable Cost, Unit Manufacturing Cost, Units to Earn Target Income Werner Company produces and sells disposable foil baking pans to retailers for $2.70 per pan. The variable cost per pan is as follows: Direct materials $0.21 Direct labor 0.56 Variable factory overhead 0.71 Variable selling expense 0.17 Pored manufacturing cost totals $224,347 per year. Administrative cost (all fixed) totals $30,593. Required: 1. Compute the number of pans that must be sold for Werner to break even pans 2. Conceptual Connection: What is the unit variable cost? What is the unit variable manufacturing cost? Round your answers to the nearest cent. Unit variable cost Unit variable manufacturing cost Which is used in cost-volume-profit analysis? 3. How many pans must be sold for Werner to earn operating income of $12.4957 pans 4. How much sales revenue must Werner have to earn operating income of $12,495?

Answer 1

Solution: 1) 242800 BEP in units Fixed cost/CM per unit (224347+30593)/(2.7-0.21-0.56-0.71-0.17) 2) Direct material Direct labor Variable factory overhead variable selling expense Unit variable cost 0.21 0.56 0.71 0.17 0.17 Direct material Direct labor Variable factory overhead Unit variable manufacturing cost 0.21 0.56 0.71 1.48 Which is used in cost volume profit analysis? Unit variable cost 3) 254700 Required unit sales =(Target profit + Fixed cost)/CM per unit (12495+224347+30593)/(2.7-0.21-0.56-0.71-0.17) 4) 687690 | Required sales revneue=Required sales units x SP 254700*2.7