Stuart Manufacturing Company reported the following data
regarding a product it manufactures and sells. The sales price is
$49.
Variable costs | |||
Manufacturing | $ | 12 | per unit |
Selling | 5 | per unit | |
Fixed costs | |||
Manufacturing | $ | 151,000 | per year |
Selling and administrative | $ | 261,800 | per year |
Required
Use the per-unit contribution margin approach to determine the break-even point in units and dollars.
Use the per-unit contribution margin approach to determine the level of sales in units and dollars required to obtain a profit of $195,200.
Suppose that variable selling costs could be eliminated by employing a salaried sales force. If the company could sell 21,800 units, how much could it pay in salaries for salespeople and still have a profit of $195,200? (Hint: Use the equation method.)
Contribution margin per unit = Selling price per unit - Variable cost
= $49 - $12 - $5
= $32 per unit
a.
Breakeven point in units = Total fixed cost / Contribution margin per unit
= ($151,000 + $261,800) / $32
= 12,900 units
Breakeven point in dollars = [Total fixed cost / Contribution margin per unit] X Selling price per unit
= [($151,000 + $261,800) / $32] X $49
= $632,100
b.
Sales in units = (Total fixed cost + Desired profit) / Contribution margin per unit
= ($151,000 + $261,800 + $195,200) / $32
= 19,000 units
Breakeven point in dollars = [(Total fixed cost + Desired profit) / Contribution margin per unit] X Selling price per unit
= [($151,000 + $261,800 + $195,200) / $32] X $49
= $931,000
c.
If variable selling cost is eliminated, contribution margin is:
= $49 - $12
= $37
Salaries expense = (Units sold X Contribution margin) - Fixed cost - desired profit
= (21,800 X $37) - $151,000 - $261,800 - $195,200
= $198,600
Stuart Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales...
Bauer Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales price is $100. Variable costs Manufacturing $ 30 per unit Selling 12 per unit Fixed costs Manufacturing $ 360,000 per year Selling and administrative $ 162,000 per year Required Use the per-unit contribution margin approach to determine the break-even point in units and dollars. Use the per-unit contribution margin approach to determine the level of sales in units and dollars required to obtain a...
Vernon Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales price is $45. Variable costs Manufacturing $ 12 per unit Selling 5 per unit Fixed costs Manufacturing $ 168,000 per year Selling and administrative $ 184,800 per year Required Use the per-unit contribution margin approach to determine the break-even point in units and dollars. Use the per-unit contribution margin approach to determine the level of sales in units and dollars required to obtain a...
Bauer Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales price is $100. Variable costs Manufacturing $ 30 per unit Selling 12 per unit Fixed costs Manufacturing $ 360,000 per year Selling and administrative $ 162,000 per year Required Use the per-unit contribution margin approach to determine the break-even point in units and dollars. Use the per-unit contribution margin approach to determine the level of sales in units and dollars required to obtain a...
Munoz Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales price is $46. Required Use the per-unit contribution margin approach to determine the break-even point in units and dollars. Use the per-unit contribution margin approach to determine the level of sales in units and dollars required to obtain a profit of $182,500. Suppose that variable selling costs could be eliminated by employing a salaried sales force. If the company could sell 21,600 units, how...
Gibson Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales price is $44. Variable costs Manufacturing Selling $11 per unit 7 per unit Fixed costs Manufacturing Selling and administrative $160,000 per yeair $180,600 per year Required a. Use the per-unit contribution margin approach to determine the break-even point in units and dollars. b. Use the per-unit contribution margin approach to determine the level of sales in units and dollars required to obtain a profit...
Campbell Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales price is $42. $ 14 per unit 4 per unit Variable costs Manufacturing Selling Fixed costs Manufacturing Selling and administrative $169,000 per year $135,800 per year Required a. Use the per-unit contribution margin approach to determine the break-even point in units and dollars. b. Use the per-unit contribution margin approach to determine the level of sales in units and dollars required to obtain a...
Fanning Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales price is $46. $ 10 per unit 4 per unit Variable costs Manufacturing Selling Fixed costs Manufacturing Selling and administrative $164,000 per year $ 261,600 per year Required a. Use the per-unit contribution margin approach to determine the break-even point in units and dollars. b. Use the per-unit contribution margin approach to determine the level of sales in units and dollars required to obtain...
Adams Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales price is $50. 11 per unit 4 per unit Variable costs Manufacturing Selling Fixed costs Manufacturing Selling and administrative $168,000 per year $273,000 per year Required a. Use the per-unit contribution margin approach to determine the break-even point in units and dollars. b. Use the per-unit contribution margin approach to determine the level of sales in units and dollars required to obtain a profit...
Solomon Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales price is $50. $ 11 per unit 7 per unit Variable costs Manufacturing Selling Fixed costs Manufacturing Selling and administrative $ 161,000 per year $274,200 per year Required a. Use the per-unit contribution margin approach to determine the break-even point in units and dollars. b. Use the per-unit contribution margin approach to determine the level of sales in units and dollars required to obtain...
Solomon Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales price is $44. Variable costs Manufacturing Selling Fixed costs Manufacturing Selling and administrative 16 per unit 3 per unit $160,000 per year $172,500 per year Required a. Use the per-unit contribution margin approach to determine the break-even point in units and dollars. b. Use the per-unit contribution margin approach to determine the level of sales in units and dollars required to obtain a profit...