# Computation of Break Even Point

Show your work

4. L.F Company manufactures and sells a single product that sells for $480 per unit; variable costs are $300. Annual fixed costs are $990,000. Current sales volume is $4,200,000. Compute the break-even point in dollars.

5. L.F Company manufactures and sells a single product that sells for $480 per unit; variable costs are $300. Annual fixed costs are $990,000. Current sales volume is $4,200,000. Dunkin company management targets an annual after-tax income of $843,750. The company is subject to a 25% income tax rate. Compute the unit sales to earn the target after-tax net income.

6. LFCompany manufactures and sells a single product that sells for $480 per unit; variable costs are $300. Annual fixed costs are $990,000. Current sales volume is $4,200,000. Dunkin company management targets an annual after-tax income of $843,750. The company is subject to a 25% income tax rate. Compute the dollar sales to earn the target after-tax net income.

© BrainMass Inc. brainmass.com December 15, 2020, 10:52 pm ad1c9bdddfhttps://brainmass.com/business/financial-ratios/computation-break-even-point-569197

#### Solution Summary

The solution is provided in three parts as follows.

1. Computation of the break-even point in dollars.

2. 5 Computation of the unit sales to earn the target after-tax net income and Verification of Answer:

3. Sales Dollars required to earn After Tax Net income of 843750 or before tax net income of 1125000=