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Calculate and interpret the break-even point in both dollars

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Reference no: EM132601863

Data from the latest income statement of XYLEM Pt y Ltd for the last 12 months is extracted as follows. You need to customize the name and figures to make it unique.

Annual Volume                                              45,000 Units

Selling price per unit                                           $85

Variable manufacturing cost per unit                      $45

Annual fixed manufacturing costs                        $250,000

Variable marketing and distribution costs per unit   $15

Annual fixed non-manufacturing costs               $350,000

Question 1: Calculate and interpret the break-even point in both dollars and units for 2019.

Question 2: Calculate and interpret the margin of safety in both units and sales dollars.

Question 3: Calculate and interpret the profit achieved in 2019.

Question 4: Changes in marketing strategy are planned for 2020. This would increase variable marketing and distribution costs by $10 per unit and reduce fixed non-manufacturing costs by $50,000 per year. Calculate the units that would need to be sold in 2020 to achieve the same profit as in 2019.

Reference no: EM132601863

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