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# Managerial Accounting

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Van Roekel Company sells a single product. The product has a selling price of \$100 per unit and variable expenses of 80% of sales. If the company's fixed expenses total \$150,000 per year, what will the break even point be? My answer must be given in dollars and units.

Truesdale Company sells hand crafted furniture. One item it sells is a foot stool which sells for \$30 per unit. The variable cost related to the stool, including product and shipping costs, are \$18 per unit. Total fixed cost for the company are \$60,000. Assuming the stools are the only product the company sells this year, draw a CVP graph to represent the company's sales and expenses. From this graph, compute the approximate breakeven point in dollars and units.

The following is Charles Corporation's contribution format income statement for last month.

Sales - 4,000,000
Less variable expenses - 2,800,000
Contribution margin - 1,200,000
Less fixed expenses - 720,000

Net Income - 480,000

The company has no beginning or ending inventories. A total of 80,000 units were produced and sold last month.

Part (a) What is the company's breakeven in sales dollars?
Part (b) How many units would the company have to sell to attain target profits of \$600,000?
Part (c) What is the company's margin of safety
Part (d) What is the company's degree of operating leverage?

#### Solution Summary

Solution contains calculations of margin of safety,degree of operating leverage,break even in sales dollars and sales to earn targeted profit.

\$2.19