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Lindon Company is the exclusive distributor for an automotive product that sells for $52.00 per unit and has a CM ratio of 30%. The companys
Lindon Company is the exclusive distributor for an automotive product that sells for $52.00 per unit and has a CM ratio of 30%. The companys fixed expenses are $366,600 per year. The company plans to sell 27,900 units this year.
Required:
- What are the variable expenses per unit?
Note: Round your "per unit" answer to 2 decimal places.
- What is the break-even point in unit sales and in dollar sales?
- What amount of unit sales and dollar sales is required to attain a target profit of $210,600 per year?
- Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $5.20 per unit. What is the companys new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $210,600?
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