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What is the break-even point in phones

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Reference no: EM132831607

Question - Berhannan's Cellular sells phones for $350. The unit variable cost per phone is $230 plus a selling commission that is 5% of sales. Fixed costs for the period are as follows:

Manufacturing costs, $585,000

Fixed selling and administrative, $350,000

Required -

1. Calculate the total contribution margin and the contribution margin per unit if 12,000 phones are sold.

2. What is the break-even point in phones?

3. How many phones must be sold to earn target operating income of $200,000?

4. Assume the company has a target net income of $150,000 and a tax rate of 30%.

a. Calculate the target operating income.

b. Calculate the number of phones that must be sold to earn the target net income.

c. Calculate the target revenues needed to earn target net income.

Reference no: EM132831607

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