Break Even Units Units for Target Profit Jay Zee Company makes an in car navigation system Next year, Jay Zee plans to sell 24,000 units at a price of $370 each Product costs include Direct materials $78 00 Direct labor $44 00 Variable overhead $11 00 Total fixed factory overhead $635,800 Variable selling expense is a commission of 3 percent of price fixed selling and administrative expenses total $110,000 Required 1 Calculate the sales commission per unit sold If required, round your answers to the nearest dollar Use rounded answers in subsequent computations $ 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 Contribution margin Fixed expenses Sales Variable expenses $ Less Contribution margin Less Fixed expenses Less Sales Less Variable expenses Contribution margin Fixed expenses Sales Variable expenses $ Less Contribution margin Less Fixed expenses Less Sales Less Variable expenses Contribution margin Fixed expenses Operating income Operating loss $ Feedback 3 Calculate the number of units Jay Zee Company must sell to achieve target operating income (profit) of $409,512 Round your answer to the nearest whole number units 4 What if the Jay Zee Company wanted to achieve a target operating income of $395,500 Would the number of units needed increase or decrease compared to your answer in Requirement 3 Round your answer to the nearest whole number Increase Decrease Compute the number of units needed for the new target operating income 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 24,000 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 24,000 units at a price of $370 each. Product costs include:

Direct materials	$78.00
Direct labor	$44.00
Variable overhead	$11.00
Total fixed factory overhead	$635,800

Variable selling expense is a commission of 3 percent of price; fixed selling and administrative expenses total $110,000.

Required:

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

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
Contribution margin Fixed expenses Sales Variable expenses	$
Less: Contribution margin Less: Fixed expenses Less: Sales Less: Variable expenses
Contribution margin Fixed expenses Sales Variable expenses	$
Less: Contribution margin Less: Fixed expenses Less: Sales Less: Variable expenses
Contribution margin Fixed expenses Operating income Operating loss	$

Feedback

3. Calculate the number of units Jay-Zee Company must sell to achieve target operating income (profit) of $409,512. Round your answer to the nearest whole number.

units

4. What if the Jay-Zee Company wanted to achieve a target operating income of $395,500? Would the number of units needed increase or decrease compared to your answer in Requirement 3? Round your answer to the nearest whole number.