Long Company has a unit-selling price of $750, variable costs per unit of $400,

Question

Long Company has a unit-selling price of $750, variable costs per unit of $400, and fixed costs of $300,000.

Instructions:

Part A) Compute the break-even point in units. Round answer up to the next whole unit.

Part B) Compute the break even in dollars.

Part C) Assume Long Company sets a target net income goal of $1,200,000.

Part A)

Break even in units =

Part B)

Break even in dollars =

Part C)

Required sales to meet target net income of $1,200,000 =

Long Company has a unit-selling price of $750, variable costs per unit of $400, and fixed costs of $300,000. Compute the break-even point in units. Round answer up to the next whole unit. Compute the break even in dollars. Assume Long Company sets a target net income goal of $1,200,000. Break even in units = Break even in dollars = Required sales to meet target net income of $1,200,000 =

Explanation / Answer

A) Break even point(units)=total fixed cost/Contribution per unit(price per unit-Variable cost per unit)

=$300000/(750-400)

=$857.14Units

Break even point(dollars)=857.14*750

=$642855

required sales for the condition=variable cost + fixed cost +required profit

Or 750x=400x+300000+1200000

Or 350x=1500000

Or sales required=1500000/350

=4285.71units

Sales=4285.71*750

=$3214282

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