Question
ABC Company is the distributor of a product that sells for $502per unit and has a CM ratio of 20%. The company's fixed cost are
ABC Company is the distributor of a product that sells for $502per unit and has a CM ratio of 20%.
The company's fixed cost are $200,000 per year. The company's fixed cost are $300,000 per year.
The company plans to sell 22,000 units of product this year.
ABC Company is the distributor of a product that sells for $602per unit and has a CM ratio of 30%.
Required (Show all calculations/working):
A) What are the variable expenses per unit?
B) What is the breakeven point in unit sales and dollar sales?
C) What amount of unit sales and dollar sales are required to earn a profit of $50,000 per year?
D) If the company sells 22,000 units of product this year, what is the expected profit?
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Intermediate Accounting principles and analysis
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso
2nd Edition
471737933, 978-0471737933
