How do I find the fixed expense I know the formulas is fixed expense operating income / contribution margin per unit = breakeven sales in unit. ___ + 0 / $ 1200 = ___
Homework: Chapter 7 Homework (required) Save Score: 0.56 of 1 pt 5 of 12 (5 complete) HW Score: 37.43%, 4.49 of 12 pts x E7-27A (similar to) Question Help Kerrigan Garage Doors manufactures a premium garage door. Currently, the price and cost data associated with the premium garage door are as follows: (Click the icon to view the data.) i (Click the icon to view more information.) Read the requirements. i More Info X Requirement 1. What is the company's current breakeven in units and in dollars? Kerrigan Garage Doors has undertaken several sustainability projects over the Begin by identifying the formula to compute the breakeven sales in units using the contribution margin approach. past few years. Management is currently evaluating whether to develop a Fixed expenses Operating income ) / Contribution margin per unit = Breakeven sales in units comprehensive software control system for its manufacturing operations that would significantly reduce scrap and waste generated during the manufacturing process. If the company were to implement this software control system in its manufacturing The breakeven point in units is 200 units. operations, the use of the software control system would result in an increase of $120,000 in its annual fixed costs while the average variable manufacturing cost The breakeven point in dollars is $ 480,000 per door would drop by $240 Requirement 2. If the company expects to sell 290 premium garage doors in the upcoming year, and it does not develop the software control s Print Done Begin by identifying the formula to compute the operating income. Sales revenue Variable expenses Fixed expenses = Operating income i Data Table - X If the company expects to sell 290 garage doors, and it does not develop the software control system, its expected operating income is $ 108,000 Requirement 3. If the software control system were to be developed and implemented, what would be the company's new breakeven point in units and in dollars Average selling price per premium garage door . . . . . . . . $ 2,400 Average variable manufacturing cost per door . . . . . . . . . 1,000 The breakeven point in units is units. Average variable selling cost per door . . . . . .. . . . . . . . 200 Total annual fixed COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . 240,000 Print Done
