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Problem 3-19A (Algo) Effect of converting variable to fixed costs LO 3-1, 3-2 Zachary Manufacturing Company reported the following data regarding a product it manufactures
Problem 3-19A (Algo) Effect of converting variable to fixed costs LO 3-1, 3-2 Zachary Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales price is $44. $ 16 per unit 4 per unit Variable costs Manufacturing Selling Fixed costs Manufacturing Selling and administrative $152,000 per year $160,000 per year Required a. Use the per-unit contribution margin approach to determine the break-even point in units and dollars. b. Use the per-unit contribution margin approach to determine the level of sales in units and dollars required to obtain a profit of $177,600. c. Suppose that variable selling costs could be eliminated by employing a salaried sales force. If the company could sell 20,200 units, how much could it pay in salaries for salespeople and still have a profit of $177,600? (Hint: Use the equation method.) a. Break-even point in units Break-even point in dollars Required sales in units Required sales in dollars c. Fixed cost of salaries
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