Question

Zachary Corporation produces products that it sells for $18 each. Variable costs per unit are $6, and annual fixed costs are $247,200. Zachary desires to earn a profit of $39,600. Required Use the equation method to determine the break-even point in units and dollars. Determine the sales volume in units and dollars required to earn the desired profit.

Answer 1

See below

Step-by-step explanation:

Break even point is computed as

= Fixed cost + desired profit/ Contribution margin

Where ;

Contribution margin = Selling price per unit - Variable cost per unit.

Break even point

= $247,200 + $39,600 / ($18 - $6)

= $247,200 / $12

= 23,900 units