Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Break-Even Units: Units for Target Profit Jay-Zee Company makes an in-car navigation system. Next year, Jay-Zee plans to sell 20,000 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 20,000 units at a price of $380 each. Product costs include:

Direct materials $80.00
Direct labor $46.00
Variable overhead $11.00
Total fixed factory overhead $705,800

Variable selling expense is a commission of 6 percent of price; fixed selling and administrative expenses total $86,200.

Required:

image text in transcribed

image text in transcribed

1. Calculate the sales commission per unit sold. If required, round your answers to the nearest dollar. Use rounded answers in subsequent computations. X per unit Calculate the contribution margin per unit. per unit 2. How many units must Jay-Zee Company sell to break even? Round your answer to the nearest whole number. units Feedback 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 3. Calculate the number of units Jay-Zee Company must sell to achieve target operating income (profit) of $398,640. Round your answer to the nearest whole number. units 4. What if the Jay-Zee Company wanted to achieve a target operating income of $385,000? Would the number of units needed increase or decrease compared to your answer in Requirement 3? Round your answer to the nearest whole number. Compute the number of units needed for the new target operating income. units

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Financial Accounting

Authors: Clarence Byrd, Ida Chen

4th Edition

013089611X, 978-0130896117

More Books

Students also viewed these Accounting questions