Cost volume profit analysis-abc company

Reference no: EM13817594

Problem: Cost Volume Profit Analysis - ABC Company

The following information pertains to ABC Company, and its product, Product A.Selling price per unit $45.00Direct material cost per kg $2.00Direct labour cost per unit $1.20Variable overhead cost per unit $0.80Material required per unit 2 kgsOther variable expenses per unit $0.60Annual fixed costs:Advertising $15,000Fixed manufacturing 60,000Other fixed expenses 8,000 $83,000

Required:

1. What is the breakeven point in both units and sales dollars?

2. Assume ABC has a target net profit of $240,000 and has a tax rate of 40%. What is the breakeven point in both units and sales dollars?

3. If ABC Company chose to discontinue advertising, and instead pay $3.00 per unit as acommission, what would the breakeven point be, in both units and sales dollars?

Reference no: EM13817594

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