Question
Lindon Company is the exclusive distributor for an automotive product that sells for $44.00 per unit and has a CM ratio of 30%. The companys
Lindon Company is the exclusive distributor for an automotive product that sells for $44.00 per unit and has a CM ratio of 30%. The companys fixed expenses are $283,800 per year. The company plans to sell 25,100 units this year.
Required:
1. What are the variable expenses per unit? (Round your "per unit" answer to 2 decimal places.)
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 $151,800 per year?
4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $4.40 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 $151,800?
1. Variable expense per unit 2. Break-even point in units 30.80 38 $ 946,000 Break-even point in dollar sales 3. Unit sales needed to attain target profit Dollar sales needed to attain target profit 4. New break-even point in unit sales New break-even point in dollar sales Dollar sales needed to attain target profit
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