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Cornerstone Exercise 16.2 Break-Even Units: Units for Target Profit Jay-Zee Company makes an in-car navigation system. Next year, Jay-Zee plans to units at a price
Cornerstone Exercise 16.2 Break-Even Units: Units for Target Profit Jay-Zee Company makes an in-car navigation system. Next year, Jay-Zee plans to units at a price of $320 each. Product costs include: sell 16,000 Direct materials Direct labor Variable overhead Total fixed factory overhead S68 $40 S12 $500,000 Variable selling expense is a commission of 5 percent of price; fixed selling and administrative expenses total S116,400. Required: 1. Calculate the sales commission per unit sold. Calculate the contribution margin per unit. 2. How many units must Jay-Zee Company sell to break even? Prepare an income statement for the calculated number of units. income (profit) of $333,408. Would the number of units needed increase or decrease compared to your 3. Calculate the number of units Jay-Zee Company must sell to achieve target operating 4. What if the Jay-Zee Company wanted to achieve a target operating income of $322,00 answer in Requirement 3? Compute the number of units needed for the new target operating income
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