Lindon Company is the exclusive distributor for an automotive product that sells

Question

Lindon Company is the exclusive distributor for an automotive product that sells for $45 per unit and has a CM ratio of 35%. The company's fixed expenses are $330,750 per year. The company plans to sell 22,000 units this year.
What are the variable expenses per unit?
What is the break-even point in units and sales dollars?
What sales level in units and in sales dollars is required to earn an annual profit of $78,750?
Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $3.00 per unit. What is the company's new break-even point in units and sales dollars?

Explanation / Answer

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