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Exercise 5-14 Break-Even and Target Profit Analysis [LO5-3, LO5-4, LO5-5, LO5-6 Lindon Company is the exclusive distributor for an automotive product that sells for $54.00
Exercise 5-14 Break-Even and Target Profit Analysis [LO5-3, LO5-4, LO5-5, LO5-6 Lindon Company is the exclusive distributor for an automotive product that sells for $54.00 per unit and has a CM ratio of 30%. The company's fixed expenses are $388,800 per year. The company plans to sell 28,600 units this year. Required 1. What are the variable expenses per unit? 2. What is the break-even point in unit sales and in dollar sales? 3. What amount of unit sales and dollar sales is required to attain a target profit of $226,800 per year? 4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $5.40 per unit. What is the company's new break-even point in unit sales and in dollar sales? es 37.80 24,000 $ 1,296,000 1. Variable expense per unit 2. Break-even point in units 3. Unit sales needed to attain target profit 4. New break-even point in unit sales Break-even point in dollar sales Dollar sales needed to attain target profit New break-even point in dollar sales Dollar sales needed to attain target profit
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