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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

  1. Use the per-unit contribution margin approach to determine the break-even point in units and dollars.

  2. 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.

  3. 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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