Break-Even Units: Units for Target Profit

Jay-Zee Company makes an in-car navigation system. Next year,Jay-Zee plans to sell 18,000 units at a price of $360 each. Productcosts include:

Direct materials	$76.00
Direct labor	$43.00
Variable overhead	$11.00
Total fixed factory overhead	$597,000

Variable selling expense is a commission of 4 percent of price;fixed selling and administrative expenses total $94,200.

Required:

1. Calculate the sales commission per unitsold. If required, round your answers to the nearest dollar. Userounded answers in subsequent computations.
$ per unit

Calculate the contribution margin per unit.
$ per unit

2. How many units must Jay-Zee Company sell tobreak even? Round your answer to the nearest whole number.
units

Prepare an income statement for the calculated number of units.If an amount is zero, enter "0". Do NOT round Break-even units and,if required, round your answer to the nearest dollar.

Jay-Zee Company
Income Statement
	$
	$
	$

3. Calculate the number of units Jay-ZeeCompany must sell to achieve target operating income (profit) of$391,392. Round your answer to the nearest whole number.
units

4. What if theJay-Zee Company wanted to achieve a target operating income of$378,000? Would the number of units needed increase or decreasecompared to your answer in Requirement 3? Round your answer to thenearest whole number.

Compute the number of units needed for the new target operatingincome.
units