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Porcelain Computer Company manufactures personal computers and tablets. Based on the latest information from the cost accountant, using the current sales mix, the weighted average
Porcelain Computer Company manufactures personal computers and tablets. Based on the latest information from the cost accountant, using the current sales mix, the weighted average sales price per unit is $700 and the weighed-average variable cost per unit is $420. The company does not expect the sales mix to vary for the next year Average fixed costs per month are $128 800 Read the fecunements 1. What is the number of units that must be sold each month to reach the breakeven point? 2. If the company currently sells 810 units per month, what is the margin of safety in units and dollars? 3. If Porcelain Computer Company desires to make a profit of $39,200 per month, how many units must be sold? 4. Porcelain Computer Company thinks it can restructure some costs so that fixed costs will be reduced to $22.400 per month, but the weighted average variable cost per unit will increase to $630 per unit. What is the new breakeven point in units? Does this increase or decrease the margin of safety? Why or why not
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