Question - Yoni Corporation manufactures skateboards and is in the process of preparing next year's budget. The pro forma income statement for the current year is presented below:
Sales (60,000 units) $1,800,000
Cost of Sales:
Direct Materials $300,000
Direct Labor $180,000
Variable Overhead $ 90,000
Fixed Overhead $100,000
Gross Profit $ 1,130,000
Selling G & A
Variable $240,000
Fixed 250,000
Operating Income $640,000
Compute the following:
(1) What is the contribution margin per unit?
(2) What is the breakeven point in units?
(3) Assume that for the coming year, the management of Yoni anticipates a 10 percent increase in the sales price, a 12 percent increase in variable costs, and a $45,000 increase in fixed expenses. What would be the breakeven point in units for the coming year?