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What is hunter cellars break-even point in units

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Reference no: EM133011655

Hunter Cellars produces and sells bottles of wine. Price and cost data are in the table below:

Selling Price per bottle $ 37.50
Variable Costs per bottle
Direct Material $12.30
Direct Labour $6.00
Manufacturing Overhead $9.00
Selling Costs $2.40
Total VC per bottle $29.70
Annual Fixed Costs
Manufacturing Overhead $432,000.00
Selling and Administrative $621,000.00
Total FC $1,053,000.00
Forecast annual sales 140,000 units $5,250,000.00

Ignoring income taxes, calculate the following:

Problem 1. What is Hunter Cellars' break-even point in units?

Problem 2. What is the company's break-even point in sales dollars?

Problem 3. If Hunter Cellars has a target profit of $570,000.00 how many bottles of wine would it have to sell?

Problem 4. Calculate the company's safety margin and interpret what that number means.

Reference no: EM133011655

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