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Required information Skip to question [The following information applies to the questions displayed below.] Serendipity Sound, Inc., manufactures and sells compact discs. Price and cost
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[The following information applies to the questions displayed below.] Serendipity Sound, Inc., manufactures and sells compact discs. Price and cost data are as follows:
Selling price per unit (package of two CDs) | $ | 25.00 | |
Variable costs per unit: | |||
Direct material | $ | 10.50 | |
Direct labor | 5.00 | ||
Manufacturing overhead | 3.00 | ||
Selling expenses | 1.30 | ||
Total variable costs per unit | $ | 19.80 | |
Annual fixed costs: | |||
Manufacturing overhead | $ | 192,000 | |
Selling and administrative | 276,000 | ||
Total fixed costs | $ | 468,000 | |
Forecasted annual sales volume (120,000 units) | $ | 3,000,000 | |
In the following requirements, ignore income taxes.
Required: 1. What is Serendipity Sounds break-even point in units? (Do not round intermediate calculations.)
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