Paney Company makes calendars. Information on cost per unit is as follows: Direct materials $1.50 Direct...
Paney Company makes calendars. Information on cost per unit is as follows: Direct materials $1.50 Direct labor 1.20 Variable overhead 0.90 Variable marketing expense 0.40 Fixed marketing expense totaled $13,000 and fixed administrative expense totaled $35,000. The price per calendar is $10. Refer to Figure 4-3. What is the break-even point in units?
Homework Answers
| Variable cost per unit: | |||
| Direct materials | = | $ 1.50 | |
| Direct labor | = | $ 1.20 | |
| Variable overhead | = | $ 0.90 | |
| Variable marketing expense | = | $ 0.40 | |
| Total Variable cost per unit | = | $ 4 | |
| Price per Calendar | = | $ 10 | |
| Contribution Margin Per unit | = | Price per unit - Variable cost per unit | |
| = | $10 - $4 | ||
| = | $ 6 | ||
| Fixed cost: | |||
| Fixed marketing expense | = | $ 13,000 | |
| Fixed Administrative expense | = | $ 35,000 | |
| Total Fixed cost | = | $ 48,000 | |
| Break - even point in units | = | Total Fixed cost / Contribution Margin Per unit | |
| = | $48,000 / $6 | ||
| = | 8,000 | units | |
| Therefore, Break - even point in units is 8,000 units. | |||
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Paney Company makes calendars. Information on cost per unit is
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Paney Company makes calendars, Information on cost per unit is as follows: $1.50 1.20 Direct materials...
Paney Company makes calendars, Information on cost per unit is as follows: $1.50 1.20 Direct materials Direct labor Variable overhead Variable marketing expense 0.90 0.40 Fixed marketing expense totaled $13,000 and fixed administrative expense totaled $35,000. The price per calendar is $10. What is the break-even point in sales dollars?
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