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Compute jake company''s break-even point in units

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Reference no: EM132368013

Question

A company manufactures and sells a product with the following price and cost data for the year just ended:

Selling price $40 per unit

Variable manufacturing costs $20 per unit

Variable selling and administrative expenses $6 per unit

Fixed manufacturing overhead $208,000 per year

Fixed selling and administrative expenses $324,000 per year

Required: Show all calculations.

Part 1: a) Compute Jake Company's break-even point in units for the year just ended. b) Compute Jake Company's break-even point in sales dollars for the year just ended.

Part 2: Compute how many units need to be sold to earn an annual net operating income equal to 10% of sales during the year just ended?

Part 3: In the current year, Jake Company sold 43,000 units. Due to competition, Jake Co. will be forced to lower the selling price by 10% next year. How many units must be sold next year to earn the same income as was earned in the current year?

Reference no: EM132368013

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