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What is break-even point in unit sales and in dollar sales

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Reference no: EM131767926

Lindon Company is the exclusive distributor of an automotive product that sells for $40 per unit and has a CM ratio of 30%. The company's fixed expenses are $180,000 per year. The company plans to sell $16,000 units this year.

Using the formula method:

a. What is the break-even point in unit sales and in dollar sales?

b. What amount of unit sales and dollar sales is required to earn an annual profit of $60,000?

c. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $4 per unit. What is the company's new break-even point in unit sales and in dollar sales?

Reference no: EM131767926

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