Break even Analysis and Planning Future Sales

Prepare breakeven analysis and a C-V-P analysis planning future sales using the information below. (100 pts) Breakeven Analysis a. Planning Future Sales Write Company has a maximum capacity of 200,000 units per year. Variable manufacturing costs are S12 per unit. Fixed overhead is S600,000 per year. Variable selling, and administrative costs are S5 per unit, and fixed selling and administrative costs are S300,000 per year. The current sales price is S23 per unit. Required 1. What is the breakeven point in (a) sales units and (b) sales dollars?

  1. How many units must Write Company sell to earn a profit of 5240.000 per year?
  2. A strike at one of the company’s major suppliers has caused a shortage of materials, so the current year’s production and sales are limit. to 160,000 units. To partially offset the effect of the reduced sales on profit, management is planning to reduce fixed costs to 5841,000. Variable cost per unit is the same as last year. The company has already sold 30,000 units at the regular selling price of S23 per unit.
    a. What amount of fix. costs was covered by the total contribution margin of the first 30,000 units sold? b. What contribution margin per unit will be needed on the remaining 130,000 units to cover the remaining fixed costs and to earn a profit of 5210,000 this year?