60.1K

Verified Solution

Link Copied!

Philton Computer Company manufactures personal computers and tablets. Based on the latest information from the cost accountant, using the current sales mix, the weighted$-$average sales price per unit is $$780$ and the weighed$-$average variable cost per unit is $$546.$ The company does not expect the sales mix to vary for the next year. Average fixed costs per month are $$105,300.$

Read the requirements.

Requirement $1.$ What is the number of units that must be sold each month to reach the breakeven point?

Start by selecting the formula and entering the amounts to compute the breakeven point in units. $($Complete all input fields. Enter a $"0"$ for any zero balances.$)$

Requirements

What is the number of units that must be sold each month to reach the breakeven point?

If the company currently sells $840$ units per month, what is the margin of safety in units and dollars?

If Philton Computer Company desires to make a profit of $$16,380$ per month, how many units must be sold?

Philton Computer Company thinks it can restructure some costs so that fixed costs will be reduced to $$21,840$ per month, but the weighted$-$average variable cost per unit will increase to $$702$ per unit. What is the new breakeven point in units? Does this increase or decrease the margin of safety? Why or why not?

Answer & Explanation Solved by verified expert

See Answer