Problem 3-50 (Algo) CVP Analysis-Missing Data (LO 3-1)

Breed Products has performed extensive studies on its costs and production and estimates the following annual costs based on 166,000 units (produced and sold).

	Total Annual Costs (166,000 units)
Direct material	$	281,000
Direct labor		270,000
Manufacturing overhead		214,000
Selling, general, and administrative		138,000
Total	$	903,000

Required:

a. Compute Breeds unit selling price that will yield a profit of $491,400, given sales of 166,000 units.

b. Compute Breeds dollar sales that will yield a projected 29 percent profit on sales, assuming variable costs per unit are 53 percent of the selling price per unit and fixed costs are $385,200.

c. Management believes that a selling price of $7.70 per unit is reasonable given current market conditions. How many units must Breed sell to generate the revenues (dollar sales) determined in requirement (b)?