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The management of Shoelace Company wants to know the break-even point for its new line of tennis shoes under each of the following independent assumptions:
The management of Shoelace Company wants to know the break-even point for its new line of tennis shoes under each of the following independent assumptions: Total Fixed Costs $400,000 $400,000 $300,000 Variable Cost per Unit $36 $25 2. 3. $25 The selling price is $70 per pair of shoes. (Each pair of shoes is one unit.) Required: A. Compute the break-even point in units for each of the three independent cases. B. Compute the break-even point in sales dollars for each of the three independent cases. C. Compute the level of sales dollars required to achieve a net income of $140,000 for each of the three independent cases. D. Ignoring the data from the table above, compute how many units would need to be sold if the fixed costs were $500,000 and the variable costs were $39 per unit, the selling price was $65 per unit, and they wanted to achieve a net income of $60,000. A1 A2 Fixed costs Contribution margin per unit Break-even point in units Fixed costs Contribution margin per unit Break-even point in units Fixed costs Contribution margin per unit Break-even point in units B1 Fixed costs Contribution margin percentage Break-even point in sales dollars B2 Fixed costs Contribution margin percentage Break-even point in sales dollars B3 Fixed costs Fixed Contribution margin percentage Break-even point in sales dollars C1 Fixed costs + target profit Contribution margin percentage Sales dollars required for targeted profit C2 Fixed costs + target profit Contribution margin percentage Sales dollars required for targeted profit C3 Fixed costs + target profit Contribution margin percentage Sales dollars required for targeted profit Fixed costs + target profit Contribution margin per unit Units required for targeted profit
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