Lindon Company is the exclusive distributor for an automotive product that sells for $28.00 per unit and has a CM ratio of 30%. The company's fixed expenses are $147,000 per year. The company plans to sell 19,500 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 $63,000 per year? 4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $2.80 per unit. What is the company's new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $63,000? 19.60 17,500 490,000 25,000 700,000 1. Variable expense per unit 2. Break-even point in units 2. Break-even point in dollar sales 3. Unit sales needed to attain target profit 3. Dollar sales needed to attain target profit 4. New break-even point in unit sales 4. New break-even point in dollar sales 4. Dollar sales needed to attain target profit

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Lindon Company is the exclusive distributor for an automotive product that sells for $28.00 per unit and has a CM ratio of 30%. The
company's fixed expenses are $147,000 per year. The company plans to sell 19,500 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 $63,000 per year?
4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $2.80 per unit. What is the
company's new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $63,000?
1. Variable expense per unit
19.60
2. Break-even point in units
17,500
2. Break-even point in dollar sales
490.000
3. Unit sales needed to attain target profit
25,000
3. Dollar sales needed to attain target profit
700,000
4. New break-even point in unit sales
4. New break-even point in dollar sales
4. Dollar sales needed to attain target profit
Transcribed Image Text:Lindon Company is the exclusive distributor for an automotive product that sells for $28.00 per unit and has a CM ratio of 30%. The company's fixed expenses are $147,000 per year. The company plans to sell 19,500 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 $63,000 per year? 4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $2.80 per unit. What is the company's new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $63,000? 1. Variable expense per unit 19.60 2. Break-even point in units 17,500 2. Break-even point in dollar sales 490.000 3. Unit sales needed to attain target profit 25,000 3. Dollar sales needed to attain target profit 700,000 4. New break-even point in unit sales 4. New break-even point in dollar sales 4. Dollar sales needed to attain target profit
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