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How many units coway to sell in order to achieve net profit

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Reference no: EM132516007

Coway manufactures water filter for housing use. Owner of Coway, Smith believes that an aggressive campaign is needed next year, due to increased competition in local market. Presented below is the data for year 2020, for use in next year's advertising campaign.

Smith's sales target for the year 2021 at a level of USD1,100,000 (22,000 filters).

QUESTION

Question a. What is the break-even point in units for 2020?

Question b. Smiths believes that to attain the sales target in the year 2021, the company must incur an additional selling expense of USD20,000 for advertising, with all other costs remaining constant. What will be the break-even point in dollar sales for 2021 if the company spends the additional USD20,000?

Question c. What is the margin of safety for Coway if they achieve the sales target in 2021 without additional selling expense in b) above?

Question d. How many units do Coway needs to sell in order to achieve a net profit before tax of USD180,000, assuming all costs remain constant?

Attachment:- company expense.zip

Reference no: EM132516007

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