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Question: bauer manufacturing company reported the following data regarding a product...
Question details
Bauer Manufacturing Company reported the following data regarding a product it manufactures and sells. The sales price is $100.
Variable costs | |||
Manufacturing | $ | 30 | per unit |
Selling | 12 | per unit | |
Fixed costs | |||
Manufacturing | $ | 360,000 | per year |
Selling and administrative | $ | 162,000 | per year |
Required
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Use the per-unit contribution margin approach to determine the break-even point in units and dollars.
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Use the per-unit contribution margin approach to determine the level of sales in units and dollars required to obtain a profit of $232,000.
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Suppose that variable selling costs could be eliminated by employing a salaried sales force. If the company could sell 12,000 units, how much could it pay in salaries for salespeople and still have a profit of $232,000? (Hint: Use the equation method.)
a. Break-even points in units
Break-even points in dollars
b. Required Sales in units
Required Sales in dollars
c. Fixed cost of salaries
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