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Break-even sales and sales to realize operating income For the current year ended March 31, Cosgrove...

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Accounting

Break-even sales and sales to realize operating income For thecurrent year ended March 31, Cosgrove Company expects fixed costsof $485,300, a unit variable cost of $46, and a unit selling priceof $69.

a. Compute the anticipated break-even sales (units).__________units

b. Compute the sales (units) required to realize operatingincome of $112,700. ________units

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Solution

Anticipated break-even sales (units). 21,100 units

Sales (units) required to realize operating income of $112,700. 26000 units

Working for requirement a

A Sale Price per unit $                   69.00
B Variable Cost per Unit $                   46.00
C=A - B Unit Contribution $                   23.00
D Total Fixed cost $        485,300.00
E=D/C Breakeven point in units                     21,100

Working for requirement b

A Sale Price per unit $                   69.00
B Variable Cost per Unit $                   46.00
C=A - B Unit Contribution $                   23.00
D Total Fixed cost +Desired Income $        598,000.00
E=D/C Units to be sold                     26,000

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