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Lindon Company is the exclusive distributor for an automotive product that sells for $58.00 per...

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Question

Accounting

Lindon Company is the exclusive distributor for an automotive product that sells for $58.00 per unit and has a CM ratio of 30%. The companys fixed expenses are $435,000 per year. The company plans to sell 30,000 units this year.

Required:

1. What are the variable expenses per unit? (Round your "per unit" answer to 2 decimal places.)

2. What is the break-even point in unit sales and in dollar sales?

3. What amount of unit sales and dollar sales is required to attain a target profit of $261,000 per year?

4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $5.80 per unit. What is the companys new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $261,000?

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