Sultan Corporation operated at its normal capacity during the current year, prod

Question

Sultan Corporation operated at its normal capacity during the current year, producing 62,000 units of its single product. Sales totalled 52,000 units at an average price of $15 per unit. Variable cost of goods sold amounted to $5 per unit, and sales commissions were paid out at $4 per unit sold. Fixed product costs, incurred uniformly throughout the year, amounted to $190,000 and fixed period costs, incurred uniformly, amounted to $20,000 per quarter. Required: 1. What is Sultan's break-even point in sales dollars for the current year? (Do not round intermediate calculations. Round your answer to the nearest whole number.) Break-even point in sales in dollars 2. If Sultan's fixed product costs unexpectedly increase by 10%, what is the new unit selling price that would yield the same break-even sales as before the cost increase? (Do not round intermediate calculations and round your answer to 2 decimal places.) New sales price per unit

Explanation / Answer

1.

Working:

2.

Working:

Break-even sales   525000

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