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Compute breakeven point in dollars

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Question - Breeze Manufacturing main product is floor fans. Each fan sells for $35 and the variable manufacturing cost is 58. Fixed costs to manufacture the product is $192,000. Breeze variable selling cost is $10 per unit and fixed selling cost for the product is $60,000. Currently the company sells 34,000 units.

a. Compute contribution margin.

b. Compute breakeven point in dollars.

c. Compute margin of safety in units.

d. Compute degree of operating leverage.

e. Using degree of operating leverage compute new net income if sales increase by 25%.

f. To increase sales management is planning on increasing commisson to sales staff by $2 per unit. Advertising will increase by $20,000. This is expected to increase sales by 30%. Should the change be made?

Reference no: EM133091307

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