Answer:
Break-even point in units= 16,125
Step-by-step explanation:
To calculate the number of units of Product J to be sold next year, we can use the break-even point formula:
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Fixed costs= 195,000 + 180,000 + 170,000= $545,000
Unitary contribution margin= 160 - (96 + 24)= $40
Desired profit= $100,000
Break-even point in units= (545,000 + 100,000) / 40
Break-even point in units= 16,125
Prove:
Sales= 16,125*160= 2,580,000
Variable production costs= 16,125*96= (1,548,000)
Sales commissions= 0.15*2,580,000= (387,000)
Salaries of line supervisors= (195,000)
Traceable fixed advertising expense= (180,000)
Fixed general factory overhead= (170,000)
Net operating income= 100,000