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What is dk break-even point in sales revenue

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Reference no: EM133112786

Question - DK Corp makes and sells small rechargeable battery packs. Price and cost data are as follows:

Selling price per battery pack $25.00

Variable costs per battery pack:

Direct material $10.50

Direct labour 5.00

Manufacturing overhead 3.00

Selling costs 1.30

Total variable costs per battery pack $19.80

Annual total fixed costs:

Manufacturing overhead $192,000

Selling and administrative 276,000

Total fixed costs $468,000

Forecast annual sales (120,000 battery packs) $3,000,000

Required -

a) What is DK's break-even point in sales revenue?

b) How many battery packs does DK need to sell to make a profit of $500,000?

c) Explain how DK could use cost-volume-profit (CVP) analysis to determine the impact of increasing variable selling costs and cutting fixed administrative costs.

Reference no: EM133112786

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