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Product B Solar Panel Battery (SPB) Data for the Income Statement (SPB) The expected...

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Accounting

Product B Solar Panel Battery (SPB)

Data for the Income Statement (SPB)

The expected total sales for this product for the year end 30 June 2022 are $16,000,000 and the expected total costs and operating expenses are $10,400,000. The costs will be allocated as follows:

Table B-1

Cost/Expense item

Amount ($)

Cost of goods sold

4,700,000

Sales Salaries expense

750,000

Office Salaries expense

600,000

Advertising expense

850,000

Office supplies expense

528,000

Rent expense

980,000

Insurance expense

390,000

Utilities expense

490,000

Depreciation expense

282,000

Interest expense

380,000

Tax expense

450,000

Total

10,400,000

Cost-Volume-Profit (CVP)

This section relates to Table B-1. Each solar panel battery sells for $12,500 and the variable cost per battery is $4,922. Variable costs include sales salaries, advertising and cost of goods sold. All other costs are fixed costs and they totalled $4,100,000.

Determine:

  1. the contribution margin (CM)
  2. the break-even point (BEP)
  3. the sales units required to achieve a profit $7,000,000

Where applicable, round your answers to the nearest whole number.

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