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Question - Lindon Company is the exclusive distributor for an automotive product that sells for $26.00 per unit and has a CM ratio of 30%. The company's fixed expenses are $132,600 per year. The company plans to sell 18,800 units this year.
Required -
1. What are the variable expenses per unit? (Round your "per unit" answer to 2 decimal places.)
2. What is the break-even point in unit sales and in dollar sales?
3. What amount of unit sales and dollar sales is required to attain a target profit of $54,600 per year?
4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $2.60 per unit. What is the company's new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $54,600?
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