Question

The Atlantic Company sells a product with a break-even point of 6,220 sales units. The variable cost is $83 per unit, and fixed costs are $217,700. Determine the unit sales price. Round answer to nearest whole number. $fill in the blank 1 Determine the break-even point in sales units if the company desires a target profit of $67,165. Round answer to the nearest whole number. fill in the blank 2 units

Answer 1

a. Sales price per unit = $118

b. Break-even point in sales units = 8,139

Step-by-step explanation:

a. Determine the unit sales price. Round answer to nearest whole number. $fill in the blank 1

Break-even point in sales units = Fixed costs / (Sales price per unit - Variable cost per unit) …………….. (1)

Substituting the relevant values from the question into equation (1) and solve for Sales price per unit, we have:

6,220 = $217,700 / (Seles price per unit - $83)

6,220 (Seles price per unit - $83) = $217,700

(6,220 * Sales price per unit) - (6,220 * $83) = $217,700

(6,220 * Sales price per unit) - $516,260 = $217,700

(6,220 * Sales price per unit) = $217,700 + $516,260

(6,220 * Sales price per unit) = 733,960

Sales price per unit = 733,960 / 6,220

Sales price per unit = $118

b. Determine the break-even point in sales units if the company desires a target profit of $67,165. Round answer to the nearest whole number. fill in the blank 2 units

Break-even point in sales units = (Fixed cost + Targeted profit) / Seles price per unit - Variable cost per unit) …………….. (2)

Substituting the relevant values into equation (2), we have:

Break-even point in sales units = ($217,700 + $67,165) / ($118 - $83) = $284,865 / $35 = 8,139