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What sales level in units is required to earn an annual

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Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $100 per unit and has a CM ratio of 20%. The company's fixed expenses are $420,000 per year. The company plans to sell 25,000 knapsacks this year.2. Use the equation method for the following:

Problem a. What is the break-even point in units and in sales dollars?

Problem b. What sales level in units and in sales dollars is required to earn an annual profit of $105,000?

Problem c. What sales level in units is required to earn an annual after-tax profit of $105,000 if the tax rate is 25%?

Problem d. Assume that through negotiation with the manufacturer, Super Sales Company is able to reduce its variable expenses by $4 per unit. What is the company's new break-even point in units and in sales dollars? (Do not round intermediate calculations. Round your final answers to the nearest whole number.)

 

Reference no: EM132760898

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