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Problem$ 3. Kenton Company produces only one product. Normal capacity is 80,000 units per year, and the unit sales price is $20. Relevant costs are:
Problem$ 3.
Kenton Company produces only one product. Normal capacity is 80,000 units per year, and the unit sales price is $20. Relevant costs are:
Unit Variable Cost | Total Fixed Cost | |
Materials | $4.00 | |
Direct Labor | $4.80 | |
Factory Overhead | $2.00 | $60,000 |
Marketing expenses | $1.20 | $20,000 |
Administrative expenses | $24,000 |
Required: Compute the following:
(1 The break-even point in units of product
(2) The break-even point in dollars of sales
(3) The number of units of product that must be produced and sold to achieve a profit of $40,000
(4) The sales revenue required to achieve a profit of $40,000
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