Blessed Company manufactures and sells adjustable covers that attach to motor homes and trailers. Blessed developed its budget for the current year if the covers would sell at a price of $400 each.
The variable expenses for each cover were forecasted to be $200 and the annual fixed expenses were forecasted to be $100,000.
Blessed had targeted a profit of $400,000. For the first 5 months of the year, only 350 units had been sold at the established price, with variable expense as planned, and it was clear that the target profit for the year would not be reached unless some actions were taken
Required:
Calculate the Break-Even Point in Units and in Dollars.
Calculate the Current Net income for the first 5 months of the year.
If no changes are made to the selling price or cost structure, estimate the number of units that must be sold during the year to attain the target profit of $400,000.