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The Tanoor company produces tip teir high rise flour. They sell it for $6.25/kg. The management estimates the following revenue and costs for year 2018
Sales$ 25,000,000
Direct Materials $ 1.50 per unit
Direct Labor$0.98 per unit
Variable OH $0.85 per unit
Fixed OH$2,800,000
Variable Selling Expenses $0.35 per unit
Fixed Selling Expenses$5,500,000
Variable Administrative Expenses $ 0.15 per unit
Fixed Administrative Expenses $350,000
Instructions:
Problem a) Prepare a CVP income statement for 2018 based on the management estimate.
Problem b) Compute the company's break-even point in units in 2018?
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