Question
Sormac Corporation manufactures and sells hand radios. Price and cost data are as follows: Selling price per unit $30.00 Variable cost per unit Direct material
| Sormac Corporation manufactures and sells hand radios. Price and cost data are as follows:
Selling price per unit | $30.00 | ||
| Variable cost per unit Direct material | $9.80 | ||
| Direct labor | $4.80 | ||
| Manufacturing overhead | $7.20 | ||
| Selling expenses | $1.90 | ||
| Total Variable Cost per Unit | $23.70 |
| |
| Annual fixed cost Manufacturing overhead | $96,800 | ||
| Selling and administrative | $42,400 | ||
| Total Fixed Cost | $139,200 | ||
|
Forecasted annual sales volume (168,000 units) |
| ||
- What is Sormac Corporation break-even point in units?
- What is the companys break-even point in sales dollars?
- How many units Sormac Corporation have to sell in order to earn $168,000.
- Management estimates that direct labor costs will increase by 20% next year but Manufacturing overhead annual fixed cost will be reduced to $79,300. How many units will the company have to sell to reach its break-even point?
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Fundamental Accounting Principles Volume 2
Authors: Kermit Larson, Heidi Dieckmann
15th Canadian Edition
1259087360, 9781259087363
