Question
Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $100 per unit and has a CM ratio of 30%.
Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $100 per unit and has a CM ratio of 30%. The companys fixed expenses are $429,000 per year. The company plans to sell 16,000 knapsacks this year.
. Use the formula method for the following:
a. What is the break-even point in units and in sales dollars?
b. What sales level in units and in sales dollars is required to earn an annual profit of $117,000?
c. What sales level in units is required to earn an annual after-tax profit of $117,000 if the tax rate is 20%?
d. Assume that through negotiation with the manufacturer, Super Sales Company is able to reduce its variable expenses by $9 per unit. What is the companys new break-even point in units and in sales dollars? (Do not round intermediate calculations. Round your final answers to the nearest whole number.)
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