Lindon Company is the exclusive distributor for an automotive product that sells for $40.00 per unit and has a CM ratio of 30%. The company’s fixed expenses are $246,000 per year. The company plans to sell 23,700 units this year.   1. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $4.00 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 $126,000?

Cornerstones of Cost Management (Cornerstones Series)
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ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
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Chapter16: Cost-volume-profit Analysis
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Problem 36P: Faldo Company produces a single product. The projected income statement for the coming year, based...
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Lindon Company is the exclusive distributor for an automotive product that sells for $40.00 per unit and has a CM ratio of 30%. The company’s fixed expenses are $246,000 per year. The company plans to sell 23,700 units this year.

 

1. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $4.00 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 $126,000?

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