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Lindon Company is the exclusive distributor for an automotive product that sells for $43.50 per unit and has a CM ratio of 30%. The companys
Lindon Company is the exclusive distributor for an automotive product that sells for $43.50 per unit and has a CM ratio of 30%. The companys fixed expenses are $289,710 per year. The company plans to sell 6,400 units this year.
Required 1. What are the variable expenses per unit? (Round your answer to 2 decimal places.) riable 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 $65,250? 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 $4.35 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 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 $65,250? 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 $4.35 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 salesStep by Step Solution
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