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Solomon Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales price is $44. Variable costs Manufacturing Selling Fixed
Solomon Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales price is $44. Variable costs Manufacturing Selling Fixed costs 14 per unit 8 per unit Manufacturing $157,000 per year Selling and administrative $107,000 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 $184,800. 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 $184,800? (Hint: Use the equation method.) a. Break-even point in units Break-even point in dollars b. Required sales in units C. Required sales in dollars Fixed cost of salaries
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