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Discuss how many units would montreal company need to sell

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Reference no: EM131793409

Compute the answers to each of the following independent situations.

Use the contribution margin ratio to calculate break even point sales.

a. Orlando Ray sells liquid and spray mouthwash in a sales mix of 1:2, respectively. The liquid mouthwash has a contribution margin of $8 per unit; the spray's CM is $6 per unit. Annual fixed cost for the company is $101,600. How many units of spray mouthwash would Orlando Ray sell at the break-even point?

b. Piniella Company has a break-even point of 6,900 units. At BEP, variable cost is $7,800 and fixed cost is $2,346. If one unit over breakeven is sold, what will be the company's pre-tax income increase? Round your answer to the nearest cent.

c. Montreal Company's product sells for $14 per bottle. Annual fixed costs are $205,000 and variable cost is 43 percent of selling price. How many units would Montreal Company need to sell to earn a 25 percent pre-tax profit on sales? Round your answer up to the next whole unit.

d. York Company has a BEP of 3,440 units. The company currently sells 3,950 units at $65 each. What is the company's margin of safety in units, in sales dollars, and as a percentage? Round the percentage to two decimal places.

Reference no: EM131793409

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