Question - Units Sold to Break Even, Unit Variable Cost, Unit Manufacturing Cost, Units to Earn Target Income Prachi Company produces and sells disposable foil baking pans to retailers for $2.40 per pan. The variable cost per pan is as follows:
Direct materials - $0.23
Direct labor - 0.51
Variable factory overhead - 0.72
Variable selling expense - 0.12
Fixed manufacturing costs totals $141,145 per year. Administrative cost (all fixed) totals $19,247.
Required:
1. Compute the number of pans that must be sold for Prachi to break even.
2. Conceptual Connection: What is the unit variable cost? What is the unit variable manufacturing cost? Round your answers to the nearest cent.
Which is used in cost-volume-profit analysis? Why?
The input in the box below will not be graded, but may be reviewed and considered by your instructor.
3. How many units must be sold for Prachi to earn operating income of $7,626?
4. How much sales revenue must Prachi have to earn operating income of $7,626?