The Saunders Company is trying to do some planning for the coming month. The following information...
The Saunders Company is trying to do some planning for the coming month. The following information was gathered from the last month.
| Sales revenue | $300,000 |
| Fixed manufacturing expenses | 110,000 |
| Fixed marketing expenses | 20,000 |
| Fixed administrative expenses | 18,500 |
| Sales price | $20/unit |
| Variable manufacturing costs | $7/unit |
| Variable marketing costs | $2/unit |
If Saunders wants to earn operating income of $44,000 next month, how many units must be sold?
Homework Answers
Calculate required unit Sales :
Fixed Cost = 110000+20000+18500 = $148500
Variable cost per unit = 7+2 = $9 per unit
Required unit sales = (Fixed cost+desired profit)/Sale price per unit-Variable cost per unit
= (148500+44000)/(20-9)
Required unit sales = 17500 Units
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The Saunders Company is trying to do some planning for the coming month. The following information...
The Saunders Company is trying to do some planning for the coming month. The following information...
The Saunders Company is trying to do some planning for the coming month. The following information was gathered from the last month. Sales revenue $300,000 Fixed manufacturing expenses 110,000 Fixed marketing expenses 20,000 Fixed administrative expenses 18,500 Sales price $20/unit Variable manufacturing costs $7/unit Variable marketing costs $3/unit If Saunders is able to generate a 20% increase in sales volume next month through a $24,000 advertising campaign, what is the expected operating income?
The Saunders Company is trying to do some planning for the coming month. The following information...
The Saunders Company is trying to do some planning for the coming month. The following information was gathered from the last month. Sales revenue $300,000 Fixed manufacturing expenses 110,000 Fixed marketing expenses 20,000 Fixed administrative expenses 18,500 Sales price $20/unit Variable manufacturing costs $7/unit Variable marketing costs $3/unit How many units must Saunders sell next month to break even?
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