Lindon Company is the exclusive distributor for an automotive product that sells for $40 per unit and has a CM ratio of 30%.

The company\'s fixed expenses are $180,000 per year.

The company plans to sell 16,000 units this year.

1. What are the variable expenses per unit?

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 $60,000?

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 per unit. What is the company\'s 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