Asked by chante mentoor on Jun 10, 2024
Verified
For the current year ending April 30, Hal Company expects fixed costs of $60,000, a unit variable cost of $70, and an anticipated break-even point of 1,715 sales units.
a.Compute the unit sales price.
b.Compute the sales (units) required to realize an operating profit of $8,000.Round your answer to the nearest whole number.
Break-even Point
The point at which total costs equal total revenue, resulting in no net loss or gain for the business.
Variable Cost
Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor.
Fixed Costs
Costs that do not change in total despite changes in the volume of goods or services produced or sold.
- Evaluate the break-even point in the context of units and financial metrics, grasping its essential role in business planning.
- Scrutinize the effects of modifications in sales data, expenditure patterns, and pricing on a business entity's break-even position and profit outcomes.
Verified Answer
DB
destiny bravoJun 15, 2024
Final Answer :
a.$60,000 ÷ ($X - $70) = 1,715 units
X = $105
b.($60,000 + $8,000) ÷ ($105 - $70) = 1,943 units
X = $105
b.($60,000 + $8,000) ÷ ($105 - $70) = 1,943 units
Learning Objectives
- Evaluate the break-even point in the context of units and financial metrics, grasping its essential role in business planning.
- Scrutinize the effects of modifications in sales data, expenditure patterns, and pricing on a business entity's break-even position and profit outcomes.