Question

During the upcoming year De Anza Co. expects the following data: Expected unit selling price is: Expected unit variable cost is: Expected total fixed costs are: $1,512,500 Required 1. Calculate breakeven point in both units and dollars. (Show work in blank space below.) $125 $70 Round units to the nearest unit and round dollars to the nearest dollar. 2. Compute sales units required to realize income from operations of $630,000. 3. Construct a cost-volume-profit chart assuming maximum sales in the relevant range of 40,000 units. ( Use the available graph template below.) Label the following parts of the graph: Sales Revenue, Fixed Costs, Variable Costs, Total Costs, Profit Area, Loss Area, and Break Even Point. fill in appropriate cost amounts on y axis 5,000 15,000 20,000 UNITS 25,000 30,000 35,000 40,000 10,000

Answer 1

step: 1. Expecked selling pode per ont ess: fxpected $ 125 Unit $ 70 vatiable cst $55 Contoet bution per unst Fixed costs 2. Braakeven point n Unsts - Contr button parr unit 291 F1512,500 13 $55 mul 2 27,500 Unsts Contoee bution t K (00 3. Prafst Volume Ratlo Sales CPV Ratto) 326 $55 x 1O0 1281 KALEA4 12 125

H. Baak evan patn En dollars PExed costs PV Ratio $ 1512, 500 s 2 $ 3437,500 át ean be also caleulated by Contresbution Unit x Salos piee per Unit 27500 Units x125 $3437 600 2 5. Recruirad Sales Unet to realize Eneome t9com oporation of630, 000 fixed cost tTarget ineome Contoecbulion per Unst 15/2, 500 + $630 000 $ 55 38 954.5 38955 Onits 2

6. Cost-volume-profit chart

50s0 sales ormue 4000 Total asts Boreakgrm Point 36D Ppeft Agciay Vadable cost 250D LOs Aea 1500 Peed cost ene 500 5000 1000 1500 20,00 2600 30 35000 19 00 Unsts Cost-volume- Doafet ehart Coot and Salos (fn 'o00 dallars)

workings Cost of 40000 Unils 49000 $70 t 15/2.600 2 431 2500 da1 Sales piec ot 40,0 unts 2 4900Ox125 25000 0D $5000 o 61ap of yors 2 10 2 $500,000