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What is the company new break-even point in units

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Reference no: EM133146528

Question - Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $100 per unit and has a CM ratio of 40%. The company's fixed expenses are $480,000 per year. The company plans to sell 13,000 knapsacks this year.

Required -

1. What are the variable expenses per unit?

2. Use the equation method for the following:

a. What is the break-even point in units and in sales dollars?

b. What sales level in units and in sales dollars is required to earn an annual profit of $104,000?

c. What sales level in units is required to earn an annual after-tax profit of $104,000 if the tax rate is 20%?

d. Assume that through negotiation with the manufacturer. Super Sales Company is able to reduce its variable expenses by $8 per unit. What is the company's new break-even point in units and in sales dollars?

Reference no: EM133146528

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