Asked by calista Williams on Jul 26, 2024
Verified
For the current year ending April 30, Hal Company expects fixed costs of $60,000, a unit variable cost of $70, and anticipated break-even 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 answer to the nearest whole number.
Break-Even
The point where total expenses match total income, leading to neither a profit nor a loss.
Unit Variable Cost
The cost associated with producing one additional unit of product, including materials, labor, and other variable costs.
Fixed Costs
Overheads like rent, salaries, and insurance that stay the same, irrespective of how much is produced or sold.
- Evaluate the equilibrium points where total costs match total revenues in both units and dollars, for scenarios with a single product or a range of products.
- Employ fixed and variable cost concepts to compute the sales required to achieve specified earnings targets.
Verified Answer
JB
JAMES BAILEYJul 29, 2024
Final Answer :
(a)$60,000/ ($X - $70) = 1,715 unitsX = $105
(b) ($60,000 + $8,000)/ ($105 - $70) = 1,943 units
(b) ($60,000 + $8,000)/ ($105 - $70) = 1,943 units
Learning Objectives
- Evaluate the equilibrium points where total costs match total revenues in both units and dollars, for scenarios with a single product or a range of products.
- Employ fixed and variable cost concepts to compute the sales required to achieve specified earnings targets.