Break Even Units Units for Target Profit Jay Zee Company makes an in car navigation system Next year, Jay Zee plans to sell 21,000 units at a price of $340 each Product costs include Direct materials $71 00 Direct labor $41 00 Variable overhead $10 00 Total fixed factory overhead $579,200 Variable selling expense is a commission of 4 percent of price fixed selling and administrative expenses total $83,800 Required 1 Calculate the sales commission per unit sold If required, round your answers to the nearest dollar Use rounded answers in subsequent computations $fill in the blank 54a5bc00501e058 1 per unit Calculate the contribution margin per unit $fill in the blank 54a5bc00501e058 2 per unit 2 How many units must Jay Zee Company sell to break even Round your answer to the nearest whole number fill in the blank 54a5bc00501e058 3 units Feedback 1 Sales commissions usually are a percentage of price See Cornerstone 16 2 Price is a part of the calculation 2 Break even in units can be calculated by taking fixed costs contribution margin per unit Prepare an income statement for the calculated number of units If an amount is zero, enter 0 Do NOT round Break even units and, if required, round your answer to the nearest dollar Jay Zee Company Income Statement Contribution marginFixed expensesSalesVariable expensesSales $Sales Less Contribution marginLess Fixed expensesLess SalesLess Variable expensesLess Variable expenses Less Variable expenses Contribution marginFixed expensesSalesVariable expensesContribution margin $Contribution margin Less Contribution marginLess Fixed expensesLess SalesLess Variable expensesLess Fixed expenses Less Fixed expenses Contribution marginFixed expensesOperating incomeOperating lossOperating income $Operating income Feedback Remember to use a contribution margin format income statement You wont find gross profit on this type of income statement 3 Calculate the number of units Jay Zee Company must sell to achieve target operating income (profit) of $369,648 Round your answer to the nearest whole number fill in the blank 5803d206f002fcb 1 units 4 What if the Jay Zee Company wanted to achieve a target operating income of $357,000 Would the number of units needed increase or decrease compared to your answer in Requirement 3 Round your answer to the nearest whole number IncreaseDecrease Compute the number of units needed for the new target operating income fill in the blank 5803d206f002fcb 3 units

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Break-Even Units: Units for Target Profit Jay-Zee Company makes an in-car navigation system. Next year, Jay-Zee plans to sell 21,000 units at a price of

Break-Even Units: Units for Target Profit

Jay-Zee Company makes an in-car navigation system. Next year, Jay-Zee plans to sell 21,000 units at a price of $340 each. Product costs include:

Direct materials	$71.00
Direct labor	$41.00
Variable overhead	$10.00
Total fixed factory overhead	$579,200

Variable selling expense is a commission of 4 percent of price; fixed selling and administrative expenses total $83,800.

Required:

1. Calculate the sales commission per unit sold. If required, round your answers to the nearest dollar. Use rounded answers in subsequent computations. $fill in the blank 54a5bc00501e058_1 per unit

Calculate the contribution margin per unit. $fill in the blank 54a5bc00501e058_2 per unit

2. How many units must Jay-Zee Company sell to break even? Round your answer to the nearest whole number. fill in the blank 54a5bc00501e058_3 units

Feedback

1. Sales commissions usually are a percentage of price. See Cornerstone 16.2. Price is a part of the calculation.

2. Break-even in units can be calculated by taking fixed costs/contribution margin per unit

Prepare an income statement for the calculated number of units. If an amount is zero, enter "0". Do NOT round Break-even units and, if required, round your answer to the nearest dollar.

**Jay-Zee Company** **Income Statement**
Contribution marginFixed expensesSalesVariable expensesSales	$Sales
Less: Contribution marginLess: Fixed expensesLess: SalesLess: Variable expensesLess: Variable expenses	Less: Variable expenses
Contribution marginFixed expensesSalesVariable expensesContribution margin	$Contribution margin
Less: Contribution marginLess: Fixed expensesLess: SalesLess: Variable expensesLess: Fixed expenses	Less: Fixed expenses
Contribution marginFixed expensesOperating incomeOperating lossOperating income	$Operating income

Feedback

Remember to use a contribution margin format income statement. You wont find gross profit on this type of income statement.

3. Calculate the number of units Jay-Zee Company must sell to achieve target operating income (profit) of $369,648. Round your answer to the nearest whole number. fill in the blank 5803d206f002fcb_1 units

4. What if the Jay-Zee Company wanted to achieve a target operating income of $357,000? Would the number of units needed increase or decrease compared to your answer in Requirement 3? Round your answer to the nearest whole number.

IncreaseDecrease

Compute the number of units needed for the new target operating income. fill in the blank 5803d206f002fcb_3 units