Problem 18-5A (Part Level Submission)

Viejol Corporation has collected the following information after its first year of sales. Sales were $1,600,000 on 100,000 units, selling expenses $220,000 (40% variable and 60% fixed), direct materials $508,000, direct labor $282,200, administrative expenses $272,000 (20% variable and 80% fixed), and manufacturing overhead $382,000 (70% variable and 30% fixed). Top management has asked you to do a CVP analysis so that it can make plans for the coming year. It has projected that unit sales will increase by 10% next year.

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(a)

Correct answer. Your answer is correct.

Compute (1) the contribution margin for the current year and the projected year, and (2) the fixed costs for the current year. (Assume that fixed costs will remain the same in the projected year.)

(1) Contribution margin for current year

$Entry field with correct answer

400000

Contribution margin for projected year

$Entry field with correct answer

440000

(2) Fixed Costs

$Entry field with correct answer

464200

(b)

Compute the break-even point in units and sales dollars for the current year. (Round intermediate calculations to 2 decimal places e.g. 2.25 and final answers to 0 decimal places, e.g. 1,225.)

Break-even point in units

Break-even point in dollars

$

Need help with b.