Question
Lorge Corporation has collected the following information after its first year of sales. Sales were $1,200,000on120,000units; selling expenses $250,000(40% variable and 60% fixed); direct materials
Lorge Corporation has collected the following information after its first year of sales. Sales were $1,200,000on120,000units; selling expenses $250,000(40% variable and 60% fixed); direct materials $291,400; direct labor $250,000; administrative expenses $270,000(20% variable and 80% fixed); and manufacturing overhead $378,000(70% variable and 30% fixed). Top management has asked you to make VP analysis so that it can make plans for the coming year. It has projected that unit sales will increase by 10% next year.
Compute the break-even point in units and sales dollars for the first year.(Round contribution margin ratio to 2 decimal places e.g. 0.15 and final answers to 0 decimal places, e.g. 2,510.)
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