Reference no: EM132487556
Point 1: Viejol Corporation has collected the following information after its first year of sales. Sales were $2,000,000 on 100,000 units, selling expenses $230,000 (40% variable and 60% fixed), direct materials $490,000, direct labor $611,800, administrative expenses $278,000 (20% variable and 80% fixed), and manufacturing overhead $358,000 (70% variable and 30% fixed). Top management has asked for a CVP analysis so that it can make plans for the coming year. It has projected that unit sales will increase by 10% next year.
Contribution margin for current year $ 500,000
Contribution margin for projected year $ 550,000
Fixed Costs $ 467,800
Question 1: Compute the break-even point in units and sales dollars for the current year.
Break-even point in units:
Break-even point in dollars: