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For the current year ended March 31, Cosgrove Company expects fixed costs of $652,800, a unit...

For the current year ended March 31, Cosgrove Company expects fixed costs of $652,800, a unit variable cost of $64, and a unit selling price of $96.

Compute the anticipated break-even sales (units).

Compute the sales (units) required to realize operating income of $150,400.

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Answer #1

COMPUTATION OF ANTICIPATED BREAK-EVEN SALES (UNITS) :

Contribution per unit = selling price - variable cost per unit = $96 - $64 = $32.

Break Even Sales (units)

= (fixed cost÷contribution per unit)

= ($652800÷$32)

= 20400 units.

COMPUTATION OF THE SALES (UNITS) REQUIRED TO EARN OPERATING INCOME OF $150400.

Desired Sales (units)

= (fixed cost + desired operating income)÷contribution per unit.

= ($652800 + $150400)÷$32

= $803200 ÷ $32

= 25100 units.

_____×_____

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