Company sells one product for a price of $100.00 per unit. The variable production cost is $40.00 per unit.
- Total fixed cost = $1.8 million
- Current sales level = 75,000 units
- Calculate the following
a. BEP units
b. BEP in dollars
c. What is the current profit?
d. How many units should be sold if company needs a profit of $3 million?
Company is currently paying a fixed salary of $250,000 to the sales people. Company is thinking of cancelling the salary and paying a sales commission of $5 per unit sold. If this is implemented.
a. What will be the BEP units?
b. How many units should the company sell in order to earn the same current profit you calculated in part c above?