Break-Even Sales and Cost-Volume-Profit Chart

For the coming year, Cleves Company anticipates a unit selling price of $146, a unit variable cost of $73, and fixed costs of $423,400.

Required:

1. Compute the anticipated break-even sales (units). units

2. Compute the sales (units) required to realize a target profit of $219,000. units

3. Construct a cost-volume-profit chart, assuming maximum sales of 11,600 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a loss, or break-even.

$1,182,600	Profit
$1,065,800	Profit
$846,800	Break-even
$642,400	Loss
$511,000	Loss

4. Determine the probable income (loss) from operations if sales total 9,300 units. If required, use the minus sign to indicate a loss. $

Question 2.

Sales Mix and Break-Even Sales

Data related to the expected sales of laptops and tablets for Tech Products Inc. for the current year, which is typical of recent years, are as follows:

Products	Unit Selling Price		Unit Variable Cost		Sales Mix
Laptops	$180		$120		20%
Tablets	470		220		80%

The estimated fixed costs for the current year are $831,040.

Required:

1. Determine the estimated units of sales of the overall (total) product, E, necessary to reach the break-even point for the current year. units

2. Based on the break-even sales (units) in part (1), determine the unit sales of both laptops and tablets for the current year.

Laptops:	units
Tablets:	units

3. Assume that the sales mix was 80% laptops and 20% tablets. Determine the estimated units of sales of the overall product necessary to reach the break-even point for the current year. units