Lindon Company is the exclusive distributor for an automotive product that sells for $42.00 per unit and has a CM ratio of 30%. The companys fixed expenses are $275,940 per year. The company plans to sell 6,800 units this year.

Required:

1.

What are the variable expenses per unit? (Round your answer to 2 decimal places.)

Variable expenses per unit

2.	Use the equation method:

a.	What is the break-even point in unit sales and in dollar sales?
	Break-even point in unit sales Break-even point in dollar sales

b.	What amount of unit sales and dollar sales is required to earn an annual profit of $63,000?
	Sales level in units

Sales level in dollars

c.	Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $4.20 per unit. What is the companys new break-even point in unit sales and in dollar sales?
	New break-even point in unit sales

New break-even point in dollar sales

3.	Repeat (2) above using the formula method.

	a. What is the break-even point in unit sales and in dollar sales?
	Break-even point in unit sales Break-even point in dollar sales

	b. What amount of unit sales and dollar sales is required to earn an annual profit of $63,000?
	Sales level in units

Sales level in dollars

c.	Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $4.20 per unit. What is the companys new break-even point in unit sales and in dollar sales?
	New break-even point in unit sales New break-even point in dollar sales