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Can you help with the following break-even analysis? Instructions below: Please, USE the following TABLE to complete all three parts of the exercise: Break-even analysis
Can you help with the following break-even analysis?
Instructions below:
Please, USE the following TABLE to complete all three parts of the exercise:
Break-even analysis The production of a new product required Venetian Manufactur- ing Co. to lease additional plant facilities. Based on studies, the following data have been made available: Estimated annual sales-24,000 units Amount Per Unit Estimated costs: Materials $ 96,000 $4.00 Direct labor. 14,400 0.60 Factory overhead 24,000 1.00 Administrative expense 28,800 1.20 Total.... S163,200 $6.80 Selling expenses are expected to be 5% of sales, and net income is to amount to $2.00 per unit. Required: 1. Calculate the selling price per unit. (Hint: Let "X" equal the selling price and express selling expense as a percentage of "X.") 2. Prepare an absorption costing income statement for the year ended December 31, 2013 3. Calculate the break-even point expressed in dollars and in units, assuming that administrative expense and factory overhead are all fixed but other costs are fully variable. Percent Selling Price Per Unit Amount Materials Direct labor Factory overhead Administraative expense Net income Subtotal Selling expense (5%) Selling price per unit 95% 5% 100% Venetian Manufacturing Company Income Statement For the Year Ended Decembe 1, 2013 Sales Less Cost of goods sold: Materials Direct labor Factory overhead Gross margin on sales Operating expenses: Selling expense Administrative expense Total operating expenses Net operating income Break-even sales volume a. Total fixed costs b. 1 - (Variable cost per unit - Sales price per unit) c. a = b d. Selling price per unit e. Break even sales volume in units (C = d)Step by Step Solution
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