How many units must be sold to break even, Accounting Basics

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How many units must be sold to break even

Rush Company developed the following information for itsproduct:

Per Unit

Salesprice ?

Variablecost $63

Contributionmargin 30%

Total fixedcosts $1,350,000

Instructions

Answer the following independentquestions and show computations using the contribution margintechnique to support your answers.

1. How many units must be sold to break even?

2. What is the total sales that must be generated forthe company to earn a profit of $60,000?

3. If the company is presently selling 75,000 units,but plans to spend an additional $135,000 on an advertisingprogram, how many additional units must the company sell to earnthe same net income it is now making?

4. Using the original data in the problem, compute anew break-even point in units if the unit sales price is increased20%, unit variable cost is increased by 10%, and total fixed costsare increased by $198,000.

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Accounting Basics: How many units must be sold to break even

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Accounting Basics: How many units must be sold to break even

Reference No:- TGS0555761

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Recent Questions Asked Accounting Basics

Q : Determining total interest due on the maturity date

Q : Compute volume to maintain the present profit level

Q : Ownership of another company accounts

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Q : How much are budgeted selling expenses

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Request for Solution File

Ask an Expert for Answer!!

Accounting Basics: How many units must be sold to break even

Reference No:- TGS0555761

Recent Questions Asked Accounting Basics

Q : Determining total interest due on the maturity date

Q : Compute volume to maintain the present profit level

Q : Ownership of another company accounts

Q : Compute the break-even point

Q : How many units must be sold to break even

Q : How much are budgeted selling expenses

Q : Kare company initiated a quality improvement program

Q : Sales budget as ending inventory

Q : Operating section of the statement of cash flows

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