Question
Lindon Company is the exclusive distributor for an automotive product that sells for $45.00 per unit and has a CM ratio of 32%. The companys
Lindon Company is the exclusive distributor for an automotive product that sells for $45.00 per unit and has a CM ratio of 32%. The companys fixed expenses are $302,400 per year. The company plans to sell 22,000 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? (Do not round intermediate calculations.)
c. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $5.10 per unit. What is the companys new break-even point in unit sales and in dollar sales? (Do not round intermediate calculations. Round up break even point answers to the nearest whole number.) |
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