Question

Lin corporation has a single product whose selling price is $120 and whose variable expense is $80 per unit. the company's monthly fixed expense is $50,000. 6.value: 10.00 pointsrequired information required: 1. using the equation method, determine for the unit sales that are required to earn a target profit of $10,000. hintsreferencesebook & resources hint #1 check my work 7.value: 10.00 pointsrequired information 2. using the formula method, determine for the unit sales that are required to earn a target profit of $15,000.

Answer 1

Lin Corporation has a single product whose selling price is $120 and whose variable expense is $80 per unit. The company’s monthly fixed expense is $50,000 1. Using the equation method, solve for the unit sales that are required to earn a target profit of $10,000 Sales = Variable expenses + Fixed expenses + Profit $120Q = $80Q + $50,000 + $10000 $40Q = $60000 Q = $60,000 /$40 Q =1500 Units 2. Using the format method, solve for the unit sales that are required to earn a target profit of $15,000 Sales = 50000+15000/120-80 = 1625 units. Mauro Products distributes a single product, a woven basket whose selling prices are $15 and whose variable expense is $12 per unit. The company’s monthly fixed expense is $4,200. 1. Solve for the company’s breakeven point in unit sales using the equation method. Sales = Variable expenses + Fixed expenses + Profit $15Q = $12Q + $4,200 + $0 $3Q = $4200 Q = $4200 /$3 Q =1400 Units 2. Solve for the companies breakeven point in sales dollars using the equation method and the CM ratio. X = 0.8X + 4,200 + $0 0.2X = $4200 X = $4200 / 0.2 X = $21,000 CM ratio method BEP = fixed cost /Sales-Variable cost /Sales = 4200/15-12/15 = $21000 3. Solve for the company’s breakeven point in unit sales using the format method 4200/15-12 = 1400 units. 4. Solve for the company’s breakeven point in sales dollars using the format method and the cm ration. BEP = fixed cost /1-Variable cost / Selling price = 4200/1-12/15 = $21000 CM ratio method BEP = fixed cost /Sales-Variable cost /Sales = 4200/15-12/15 = $21000

Answer 2

Profit is termed as the revenue that is earned by the firm after availing of the products or the goods and services to the customers. It is the total sum of the money that is acquired on the completion of the accomplishment of the goals of the supply met in the market.

Lin Corporation has a single product whose selling price = $120

variable expense = $80 per unit.

The company's monthly fixed expense = $50,000

1. Using the equation method, unit sales is required to earn a target profit =$10,000

Sales = Variable expenses + Fixed expenses + Profit

$120Q = $80Q + $50,000 + $10000

$40Q = $60000

$Q = \frac{\ 60,000}{\ 40 }$

Q =1500

Units 2. Using the format method, unit sales earn a target profit = $15,000 Sales =$\frac{50000+15000}{120-80} = 1625 units.$

Mauro Products distributes a single product, a woven basket whose selling prices = $15

variable expense = $12 per unit.

The company's monthly fixed expense = $4,200.

1. Solve for the company's breakeven point in unit sales using the equation method.

Sales = Variable expenses + Fixed expenses + Profit

$15Q = $12Q + $4,200 + $0

$3Q = $4200

$Q = \frac{\ 4200}{\ 3}$

Q =1400

Units 2. Solve for the companies breakeven point in sales dollars using the equation method and the CM ratio.

X = 0.8X + 4,200 + $0 0.2X = $4200

$X = \frac{\ 4200}{0.2 }$

X = $21,000

CM ratio method

BEP = fixed cost /Sales-Variable cost /Sales = $\frac{ 4200}{15}-\frac{12}{15} = \ 21000$

3. Solve for the company's breakeven point in unit sales using the format method $\frac{4200}{15-12}= 1400 units.$

4. Solve for the company's breakeven point in sales dollars using the format method and the cm ratio.

BEP = fixed cost /1-Variable cost / Selling price = 4200/1-12/15 = $21000 CM ratio method BEP = fixed cost /Sales-Variable cost /Sales = 4200/15-12/15 = $21000

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