How many units must logan sell to maintain


1) Briscoe Company sells it product for $60 per unit. During 2011, it produced 60,000 units and sold 50,000 units (there are no beginning inventory). Costs per unit are: direct materials $15, direct labor $9, and variable overhead $3. Fixed costs are $720,000 manufacturing overhead, and $90,000 selling and administrative expenses. The per unit manufacturing cost under absorption costing is

  • $41
  • $27
  • $39
  • $24

2) In 2014, Logan sold 1,000 units at $500 each, and earned net income of $50,000. Variable expenses were $300 per unit, and fixed expenses were $150,000. The same selling price is expected for 2015. Logan's variable cost per unit will rise by 10% in 2015 due to increasing material costs, so they are tentatively planning to cut fixed costs by $15,000. How many units must Logan sell in 2015 to maintain the same income level as 2014?

  • 1,176
  • 971
  • 1,088
  • 794

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