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Lindon Company is the exclusive distributor for an automotive product that sells for $42.00 per unit...

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Question

Accounting

Lindon Company is the exclusive distributor for an automotiveproduct that sells for $42.00 per unit and has a CM ratio of 30%.The company’s fixed expenses are $264,600 per year. The companyplans to sell 24,400 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 dollarsales?

3. What amount of unit sales and dollar sales is required toattain a target profit of $138,600 per year?

4. Assume that by using a more efficient shipper, the company isable to reduce its variable expenses by $4.20 per unit. What is thecompany’s new break-even point in unit sales and in dollar sales?What dollar sales is required to attain a target profit of$138,600?

Answer & Explanation Solved by verified expert
3.6 Ratings (336 Votes)
1variable expenses per unit price 1CM ratio 42 130 294 per unit 2breakeven point in unit sales Fixed cost unit contribution 264600    See Answer
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